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LAND: One of four basic categories of resources, or factors of production (the other three are labor, capital, and entrepreneurship). This category includes the natural resources used to produce goods and services, including the land itself; the minerals and nutrients in the ground; the water, wildlife, and vegetation on the surface; and the air above.

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Lesson 14: Aggregate Supply | Unit 5: Connections Page: 19 of 20

Topic: Policies <=PAGE BACK | PAGE NEXT=>

Government can use supply-management policies to shift the aggregate supply curves.
  • Supply-management policies have been less popular among politicians because they tend to be slower than demand-management policies.
  • Politicians tend to prefer faster demand-management policies when seeking to replace the slow-moving automatic mechanism.
Supply-management policies:
  • Business deregulation to reduce production cost.
  • Tax policies that stimulate capital investment.
  • Technology and education that increase capital and labor quality.

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KEYNESIAN ECONOMICS

A theory of macroeconomics developed by John Maynard Keynes based on the proposition that aggregate demand is the primary source of business-cycle instability and the most important cause of recessions. Keynesian economics points to discretionary government policies, especially fiscal policy, as the primary means of stabilizing business cycles and tends to be favored by those on the liberal end of the political spectrum. The basic principles of Keynesian economics were developed by Keynes in his book, The General Theory of Employment, Interest and Money, published in 1936. This work launched the modern study of macroeconomics and served as a guide for both macroeconomic theory and macroeconomic policies for four decades. Although it fell out of favor in the 1980s, Keynesian principles remain important to modern macroeconomic theories, especially aggregate market (AS-AD) analysis.

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Today, you are likely to spend a great deal of time at a flea market trying to buy either a 200-foot blue garden hose or a video camera with stop action features. Be on the lookout for letters from the Internal Revenue Service.
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
"When you play, play hard; when you work, don't play at all. "

-- Theodore Roosevelt, 26th US president

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