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LONG-RUN TOTAL COST: The opportunity cost incurred by all of the factors of production used in the long run (when all inputs are variable) by a firm to produce of a good or service, including wages paid to labor, rent paid for the land, interest paid to capital owners, and a normal profit paid to entrepreneurs. Unlike short-run total cost, long-run total cost can not be separated into fixed cost and variable cost. In the long run, all inputs are variable, so all cost is variable.
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SELF-CORRECTION, INFLATIONARY GAP: The automatic process through which the aggregate market achieves long-run equilibrium by eliminating an inflationary gap created by short-run equilibrium. With an inflationary gap short-run equilibrium real production is greater than full-employment real production, meaning resource markets have shortages, and in particular labor is overemployed. Self-correction is the process in which these temporary imbalances are eliminated through flexible prices as the aggregate market achieves long-run equilibrium. The key to this process is shifts of the short-run aggregate supply curve caused by changes in wages and other resource prices. The long-run result is lower wages and a decrease in short-run aggregate supply. See also | inflationary gap | aggregate market | short-run aggregate market | long-run aggregate market | short-run aggregate supply curve | aggregate supply determinants | wage | resource prices | resource prices | self-correction, recessionary gap | self-correction, market | full employment | surplus | shortage | inflation | expansion | business cycle |
Recommended Citation:SELF-CORRECTION, INFLATIONARY GAP, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 5, 2025].
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EMPLOYED PERSONS People who are actively engaged in the production of goods and services. This is one of three official categories used to classify individuals by the Bureau of Labor Statistics (BLS) based on information obtained from the Current Population Survey. The other two categories are unemployed persons and not in the labor force. The sum of employed persons and unemployed persons constitutes the civilian labor force.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time at an auction seeking to buy either storage boxes for your income tax returns or an AC adapter for your CD player. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
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"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
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NASD
National Association of Securities Dealers
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