AmosWEB is Economics: GLOSS*arama

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May 25, 2019

AmosWEB means Economics with a Touch of Whimsy!

INFLEXIBLE WAGES: The proposition that some wages adjust slowly in response to labor market shortages or surpluses. This condition is most important for macroeconomic activity in the short run and short-run aggregate market analysis. In particular, inflexible (also termed rigid or sticky) wages are a key reason underlying the positive slope of the short-run aggregate supply curve.

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CROWDING OUT: A decline in investment caused by expansionary fiscal policy. When government counteracts a recession with an increase in spending or a reduction in taxes (both resulting in an increase in the federal deficit) interest rates tend to increase. Higher interest rates then inhibit business investment in capital goods. Some pointy-headed economists argue that investment crowding out completely offsets any intended expansionary policy, but the jury's still out on this one. To the extend that crowding out occurs, economic growth is reduced if (and this is an important if) government has not seen fit to offset the loss in business investment with public investment in infrastructure, education, or other growth promoting expenditures.

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CROWDING OUT, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2019. [Accessed: May 25, 2019].

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GOVERNMENT CONSUMPTION EXPENDITURES AND GROSS INVESTMENT

The official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis measuring government purchases undertaken by the government sector. Government consumption expenditures and gross investment averages between 15-20 percent of gross domestic product. As might be expected, this percentage tends to be ebb and flow with the political winds. Some political leaders prefer more government activity, others less. However, this percentage is even more dependent on military conflicts and wars that require massive government activity. The other official expenditures included in the National Income and Product Accounts are personal consumption expenditures, gross private domestic investment, and net exports of goods and services.

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BLUE PLACIDOLA
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Today, you are likely to spend a great deal of time calling an endless list of 800 numbers looking to buy either a large flower pot shaped like a Greek urn or a small palm tree that will fit on your coffee table. Be on the lookout for telephone calls from long-lost relatives.
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John Maynard Keynes was born the same year Karl Marx died.

"There's a very positive relationship between people's ability to accomplish any task and the time they're willing to spend on it."

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International Commodities Clearing House

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