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JUDICIAL POLICY: Government policy based on enforcement of laws and regulations through the courts, especially the Supreme Court.

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Lesson 16: Aggregate Shocks | Unit 3: Basic Shifts Page: 7 of 21

Topic: AD Shifts <=PAGE BACK | PAGE NEXT=>

There are two directions that the aggregate demand curve can shift:
  • An increase in aggregate demand is a rightward shift of the AD curve.
  • A decrease in aggregate demand is a leftward shift of the AD curve.

And we have the AD curve shifting in two versions of the aggregate market, long run and short run.

This gives us four basic curve-shifting alternatives:

  • An increase, with the long-run aggregate market.
  • A decrease, with the long-run aggregate market.
  • An increase, with the short-run aggregate market.
  • A decrease, with the short-run aggregate market.

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BANK RUN

A situation in which a relatively large number of a bank's customers attempt to withdraw their deposits in a relatively short period of time, usually within a day or two. While common throughout the 1800s and early 1900s, government deposit insurance has largely eliminated banks runs in the modern economy. Historically a bank run was prompted by fears that the bank was on the verge of collapse, causing deposits to become worthless. Ironically a bank run often caused the bank to fail. Bank runs were often infectious, leading to economy-wide bank panics and business-cycle contractions.

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[What's This?]

Today, you are likely to spend a great deal of time touring the new suburban shopping complex hoping to buy either a lazy Susan for you dining room table or a set of serrated steak knives, with durable plastic handles. Be on the lookout for rusty deck screws.
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Natural gas has no odor. The smell is added artificially so that leaks can be detected.
"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. "

-- Steve Jobs, Apple Computer founder

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