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HEDGE: A method of protecting against financial (or other types) of loss by counterbalancing an action. This is commonly seen in the financial markets when investors buy options or futures contracts to protect themselves against price changes. A hedge is essentially a form of insurance. An investor hopes the price of a financial asset doesn't fall, but buying a futures or options contract can reduce the loss if this occurs.
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![](../images/a1.gif) ![](../images/b1.gif) ![](../images/c1.gif) ![](../images/d1.gif) ![](../images/e1.gif) ![](../images/f1.gif) ![](../images/g1.gif) ![](../images/h1.gif) ![](../images/i1.gif) ![](../images/j1.gif) ![](../images/k1.gif) ![](../images/l1.gif) ![](../images/m1.gif) ![](../images/n1.gif) ![](../images/o1.gif) ![](../images/p1.gif) ![](../images/q1.gif) ![](../images/r1.gif) ![](../images/s1.gif) ![](../images/t1.gif) ![](../images/u1.gif) ![](../images/v1.gif) ![](../images/w1.gif) ![](../images/x1.gif) ![](../images/y1.gif) ![](../images/z1.gif) ![](../images/nbr1.gif) OVEREMPLOYMENT: The condition in which resources are more actively engaged in the production of goods and services than they are willing and able to at current prices. This condition is most important for short-run macroeconomic activity and short-run aggregate market analysis. In particular, overemployment is a key reason for the positive slope of the short-run aggregate supply curve. Overemployment is a primary reason the macroeconomy is able to produce MORE than full-employment production in the short run. The key for overemployment rests with the purchasing power of the wages (and other resource prices) received by labor (and other resource owners). In particular, workers engage in productive activities based on the real, purchasing power of their wages. These real wages are based on nominal wages relative to the price level. Higher real wages entice workers to increase the quantity supplied of their labor. As such, they can be enticed to generate more production.When their employment and resulting production exceed full-employment levels, overemployment results. This can happen for a couple of reasons: - First, workers might be temporarily fooled into thinking the purchasing power of their wages has increased, when in reality it has not. While workers generally have close, personal knowledge of their nominal wages, especially when cashing paychecks, they are likely to have less information about the price level. A boost in nominal wages can temporarily lead them to believe that their real wages have also increased, but only because they do not recognized that the price level has increased. Because they THINK their real wages are greater they increase the quantities of their labor supplied. People work harder when they get paid more. And when they work harder, they produce more.
- Second, the purchasing power of the wages received by workers might actually increase, temporarily. This results because all wages and prices do not increase at the same pace. For example, a higher price level might prompt a few employers to pay their workers higher wages. These workers, as such, receive higher nominal wages NOW. Given that the price level has also increased, the presumption is that real wages received by these workers have not changed. However, the price of the goods and services these workers actually buy might not increase along with the overall price level. The prices that workers pay might increase LATER. Because workers really ARE receiving greater real wages NOW, they increase the quantities of their resources supplied. Once again, people work harder when they get paid more. And when they work harder, they produce more.
In both cases, workers are overemployed. They are actually working harder and producing more than they would at full employment.
![](../images/aw_sm.gif) Recommended Citation:OVEREMPLOYMENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: July 26, 2024]. Check Out These Related Terms... | | | | | | | Or For A Little Background... | | | | | | | | And For Further Study... | | | | | | | | | | | | | | |
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Today, you are likely to spend a great deal of time watching the shopping channel seeking to buy either a pair of gray heavy duty boot socks or a 50-foot blue garden hose. Be on the lookout for small children selling products door-to-door. Your Complete Scope
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More money is spent on gardening than on any other hobby.
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"Old age isn't so bad when you consider the alternative. " -- Cato, Roman orator
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AR(N) A nth-order Autoregressive Process
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