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PAPER CURRENCY: Paper usually issued by the national government that are used as money. Metal coins are also frequently included under the generic heading of currency. Currency in the U.S. economy is issued by the Federal Reserve System (paper) and the U.S. Treasury (coins). This constitutes about 30 to 40 percent of the M1 money supply. Most modern currency is fiat money.
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Lesson 16: Aggregate Shocks | Unit 2: Extension
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Page: 5 of 21
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The aggregate market has a perpetual inclination to adjust from short-run equilibrium to long-run equilibrium.- The aggregate market self-correction mechanism relies on wages, the key production cost determinant.
- Short-run labor market imbalances induce wage changes that move the aggregate market to long-run equilibrium.
A recessionary gap Unemployment causes lower wages and production costs, and an increase in short-run aggregate supply. An inflationary gap Labor market imbalances increase wages and production cost, and decrease in short-run aggregate supply. Long run equilibrium is restored in both cases.
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MARGINAL PROPENSITY TO IMPORT The change in imports purchased from the foreign induced by a change in income or production (national income or gross domestic product). The marginal propensity to import (abbreviated MPM) is another term for the slope of the imports line and is calculated as the change in imports divided by the change in income or production. The MPM plays a role in Keynesian economics. It augments the slope of the aggregate expenditures line and is part to the multiplier process. A related marginal measure is the marginal propensity to consume.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads trying to buy either yellow cotton balls or a set of steel-belted radial snow tires. Be on the lookout for telephone calls from long-lost relatives.
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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
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"The road to success is always under construction. " -- Lily Tomlin, Actress
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IS-LM
Investment/Saving-Liquidity/Money
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