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PIGOUVIAN TAX: A tax on an external cost, such as pollution, designed to use market forces to achieve an efficient allocation of resources. A. C. Pigou, one of the first economists to study the market failure of externalities, is credited with developing this tax system for internalizing costs external to the market. An external cost caused by pollution, for example, can be internalized if polluters pay a tax equal to the value of the external cost.
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INFLATION CAUSES Inflation, the persistent increase in the average price level, can be caused by an increase in aggregate demand or a decrease in aggregate supply. This suggests two basics sources, causes, or types of inflation--demand-pull inflation and cost-push inflation. While short-term bouts of inflation (up to several months) can result from anything (determinant) that might cause either increases in aggregate demand or decreases in aggregate supply, long-term inflation (a year or more) is possible ONLY through persistent increases in the money supply. As such, while demand-pull inflation and cost-push inflation are convenient ways to catalog the transmission mechanisms of inflation, the ultimate CAUSE of inflation is money.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store hoping to buy either a set of tires or a birthday gift for your grandfather. Be on the lookout for vindictive digital clocks with revenge on their minds.
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Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
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"When your values are clear to you, making decisions becomes easier. " -- Roy Disney, executive
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UR
Unemployment Rate
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