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AD-AS MODEL: An economic model relating the price level and real production that is used to analyze business cycles, gross domestic product, unemployment, inflation, stabilization policies, and related macroeconomic phenomena. The AS-AD model, inspired by the standard market model, captures the interaction between aggregate demand (the buyers) and short-run and long-run aggregate supply (the sellers).

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FOUR-SECTOR INJECTIONS-LEAKAGES MODEL: A model used to identify equilibrium in Keynesian economics based on injections (investment, government purchases, and exports) and leakages (saving, taxes, and imports) for all four sectors (household, business, government, and foreign). Equilibrium is achieved at the intersection of the S + T + M line, and I + G + X line.

     See also | injections-leakages model | S-I model | Keynesian economics | Keynesian equilibrium | saving line | investment line | injection | leakage | household sector | business sector | government sector | foreign sector | four-sector Keynesian model | two-sector injections-leakages model | three-sector injections-leakages model |


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PROFIT

Generally speaking, the difference between revenue received by a firm for production and cost incurred in the production, or the excess of revenue over cost. Three specific notions of profit exist, each with a different meaning. Accounting profit is the difference between revenue and accounting cost. Economic profit is the difference between revenue and total opportunity cost. Normal profit is opportunity cost of entrepreneurship. Profit is occasionally used synonymously with the term rent, or economic rent.

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