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SLOPE, SHORT-RUN AGGREGATE SUPPLY CURVE: The short-run aggregate supply (SRAS) curve has a positive slope, reflecting the direct relation between the price level and aggregate real production. A higher price level is related to more real production and a lower price level is related to less real production. The general reason is similar to that of market supply curves--the opportunity cost of production--three specific reasons can be identified: (1) inflexible resource prices that often makes it easier to reduce aggregate real production and resource employment when the price level falls; (2) the pool of natural unemployment, consisting of frictional and structural unemployment, that can be used temporarily to increase aggregate real production when the price level rises; and (3) imbalances in the purchasing power of resource prices that can temporarily entice resource owners to produce more or less aggregate real production than the would at full employment.
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AVERAGE FIXED COST CURVE A curve that graphically represents the relation between average fixed cost incurred by a firm in the short-run product of a good or service and the quantity produced. This curve is constructed to capture the relation between average fixed cost and the level of output, holding other variables, like technology and resource prices, constant. The average fixed cost curve is one of three average curves. The other two are average total cost curve and average variable cost curve. A related curve is the marginal cost curve.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store looking to buy either a T-shirt commemorating last Friday (you know why) or a rotisserie oven that can also toast bread. Be on the lookout for deranged pelicans.
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
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"Unless you are willing to drench yourself in your work beyond the capacity of the average man, you are just not cut out for positions at the top." -- J. C. Penney, Retailer
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LISH
last In Still Here
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