|
ADJUSTMENT, LONG-RUN AGGREGATE MARKET: Disequilibrium in the long-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the long-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the long-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases long-run equilibrium is restored. Price level changes induce changes in aggregate expenditures but NOT changes in real production. The reason is that long-run aggregate supply is full-employment real production, which is unaffected by the price level.
Visit the GLOSS*arama
|
|

|
|
BUSINESS CYCLE PHASES The recurring, but irregular, pattern of business cycles can be divided into two basic phases--expansion and contraction. An expansion is a period of increasing economic activity and a contraction is a period of declining economic activity. These two phases are marked by two transitions. The transition from expansion to contraction is termed a peak and the transition from contraction to expansion is termed a trough. The early portion of an expansion is often referred to as a recovery.
Complete Entry | Visit the WEB*pedia |


|
|
Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
|
|
"Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness." -- Martin Luther King, Jr., clergyman
|
|
NFS Not For Sale
|
|
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
|

|