Google
Sunday 
June 17, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
DEMAND-PULL INFLATION: Demand-pull inflation places responsibility for inflation squarely on the shoulders of increases in aggregate demand. This type of inflation results when the four macroeconomic sectors (household, business, government, and foreign) collectively try to purchase more output that the economy is capable of producing. In general, increasing aggregate demand means buyers want more production than the economy is able to provide. Then end result is that buyers bid up the price of existing production. The extra demand "pulls" the price level higher. You might want to compare demand-pull inflation with cost-push inflation.

Visit the GLOSS*arama

Most Viewed (Number) Visit the WEB*pedia

Lesson 9: Macro Basics | Unit 1: The Macroeconomy Page: 1 of 16

Topic: An Economy <=PAGE BACK | PAGE NEXT=>

Let's start with a definition:

An economy is an interactive system of production, distribution, and consumption of resources, goods, and services that addresses the basic economic problem of scarcity.

  • Economic functions are divided into four basic macroeconomic sectors:
  1. Household: the consumers.
  2. Business: the producers.
  3. Government: the regulators and taxers.
  4. Foreign: the others.
The household sector of the macroeconomy is everyone in an economy who consumes goods and services.
  • Consumption is the use of natural resources, goods, or services to satisfy wants and needs.
  • In a complex economy, consumption is expenditures by the household sector for the purchase of final goods and services.
  • Household sector is a term that indicates the consuming, wants-and-needs-satisfying population. Everyone in society is included in the household sector.
The household sector is responsible for consumption.

The business sector of the macroeconomy produces the goods and services that are consumed by the household sector.

  • The business sector is responsible for production by combining the four basic resources: labor, capital, land, and entrepreneurship.
  • A business is a method of combining resources for production.
  • While the business sector buys raw materials, intermediate goods, and other things. The most important purchase of the business sector is capital goods, or investment in capital.
The business sector is responsible for capital investment.

The government sector affects resource allocation and production by imposing laws and regulations that force decisions not otherwise made.

  • Three levels of government: Federal, State and Local.
  • The government sector collects taxes and buys a share of the economy's production, termed government purchases. These are goods such as national defense, highway and street construction, education, and police protection.
  • Government purchases do not include transfer payments (Social Security benefits, welfare or unemployment compensation).
The government sector is responsible for government purchases.

Economic activity is divided into domestic, everything within the political boundaries of a nation, and foreign, everything outside the boundaries.

  • Any citizen of the U.S., any firm owned by a U.S. citizen, and the government of any U.S. city are part of the domestic economy.
  • Any resident, business or government of another country is part of the foreign sector.
  • Exports are goods purchased by the foreign sector that are produced by the domestic economy.
  • Imports are goods purchased by the domestic economy that are produced by the foreign sector.
  • Net exports are the difference between exports and imports, or exports minus imports.
The foreign sector is responsible for net exports.

Course Home | Lesson Menu | Page Back | Page Next

AVERAGE FIXED COST

Total fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. When compared with price (per unit revenue), average fixed cost (AFC) indicates whether or not a profit-maximizing firm should shutdown production in the short run. Average fixed cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average variable cost. A related concept is marginal cost.

Complete Entry | Visit the WEB*pedia


APLS

WHITE GULLIBON
[What's This?]

Today, you are likely to spend a great deal of time strolling through a department store wanting to buy either a T-shirt commemorating the first day of winter or software that won't crash your computer. Be on the lookout for slow moving vehicles with darkened windows.
Your Complete Scope

This isn't me! What am I?

Two and a half gallons of oil are needed to produce one automobile tire.
"The secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, and then starting on the first one. "

-- Mark Twain, writer

CPS
Current Population Survey (US)
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster