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GROSS PRIVATE DOMESTIC INVESTMENT: Expenditures on capital goods to be used for productive activities in the domestic economy that are undertaken by the business sector during a given time period. This is the official item in the National Income and Product Accounts maintained by the Bureau of Economic Analysis measuring capital investment expenditures. Gross private domestic investment tends to be the least stable of the four expenditures, averaging between 12-18% of gross domestic product.
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Lesson 8: Market Shocks | Unit 3: Single Shifts
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Page: 8 of 20
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An increase in demand caused by one of the demand determinants.- Initial equilibrium market at price Po and quantity Qo
- Buyers acquire a sudden "appetite" for hot fudge sundaes.
A summary: - The demand curve shifts rightward.
- The initial equilibrium is no longer an equilibrium.
- The new equilibrium is at the intersection of the original supply curve with the new demand curve.
- New equilibrium price is P1 and new equilibrium quantity is Q1.
The six steps of market adjustment for an increase in demand:- A determinant changes. We have a greater appetite for hot fudge sundaes.
- A curve to shifts. The demand curve for hot fudge sundaes shifts rightward.
- A shortage or a surplus occurs. The increase in demand causes a shortage of hot fudge sundaes.
- The price changes. The price of hot fudge sundaes goes up.
- The quantities demanded and supplied change. The quantity supplied for hot fudge sundaes increases while their quantity demand is reduced.
- The market imbalance is eliminated and equilibrium is restored. The shortage of hot fudge sundaes is eliminated. The price is higher and the quantity exchanged is more.
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MARGINAL COST CURVE A curve that graphically represents the relation between the marginal cost incurred by a firm in the short-run product of a good or service and the quantity of output produced. This curve is constructed to capture the relation between marginal cost and the level of output, holding other variables like technology and resource prices constant. Three related curves are average total cost curve, average variable cost curve, and average fixed cost curve.
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WHITE GULLIBON [What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet trying to buy either a rechargeable flashlight or storage boxes for your computer software CDs. Be on the lookout for bottles of barbeque sauce that act TOO innocent. Your Complete Scope
This isn't me! What am I?
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
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"Defeat is simply a signal to press onward. " -- Helen Keller, author, lecturer
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ABA American Bankers Association, Associate in Business Administration
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