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AGGREGATE EXPENDITURE DETERMINANT: A ceteris paribus factor that affects aggregate expenditures, but which is assumed constant when the aggregate expenditure line is constructed. Changes in any of the aggregate expenditures determinants cause the aggregate expenditure line to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate expenditure line to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate expenditure line. If any determinant affects aggregate expenditures it MUST affect one of these four expenditures.
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Lesson 11: Elasticity Basics | Unit 4: A Continuum
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Page: 22 of 25
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In this unit, you should have learned about:- The elasticity continuum that ranges from 0 to infinity.
- The five elasticity alternatives -- perfectly elastic, relatively elastic, unit elastic, relatively inelastic, perfectly inelastic.
- Perfectly elastic as the alternative in which price is fixed.
- Relatively elastic as the alternative in which small changes in price cause large changes in quantity.
- Perfectly inelastic as the alternative in which quantity is fixed.
- Relatively inelastic as the alternative in which large changes in price cause small changes in quantity.
- Unit elastic as the alternative in which changes in price are matched by changes in quantity.
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LAW OF COMPARATIVE ADVANTAGE A principle that states that every nation, worker, or production entity has a production activity that incurs a lower opportunity cost than that of another nation, worker, or production entity, which means that trade between the two can be beneficial to both if each specializes in the production of a good with lower relative opportunity cost. This law is most often studied in the confines of international trade, but it also applies to labor and other types of production.
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence. " -- Martin Luther King Jr., civil rights leader
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MGF
Moment Generating Function
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