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X-M: The abbreviation for net exports, which is the difference between exports, goods and services produced by the domestic economy and purchased by the foreign sector, and imports, goods and services produced by the foreign sector and purchased by the domestic economy. While exports and imports important unto themselves, when combined into a single measure net exports captures the overall interaction between the foreign sector and the domestic economy. Arithmetically speaking, if exports exceed imports, then net exports are positive, and if imports exceed exports, the net exports are negative.
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Lesson 16: Aggregate Shocks | Unit 5: Synthesis
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Page: 20 of 21
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To illustrate a business cycle, let's begin with long-run, full-employment equilibrium.- With an expansion, consumers have accumulated durable goods.
- This decreases consumption spending and aggregate demand. The AD curve shifts leftward. We have a recession.
- Before the SRAS curve automatically shifts to restore full employment, people start buying durable goods again and the AD curve shifts rightward. We have a recovery.
- The AD curve doesn't stop at full employment. With our expansion we have (possibly) inflation.
- But accumulation of durable goods causes a decrease in aggregate demand again and another recession.
- The process continues.
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PRODUCER PRICE INDEX An index of the prices domestic producers receive from selling their output. THE Producer Price Index (PPI) is actually one of several producer price indexes compiled and published monthly by the Bureau of Labor Statistics (BLS). Others track prices for different industries and goods. This is also one of several noted price indexes used to track economic activity. Others include the Consumer Price Index (CPI) and the GDP price deflator.
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BROWN PRAGMATOX [What's This?]
Today, you are likely to spend a great deal of time strolling through a department store seeking to buy either a wall poster commemorating the 2000 Olympics or a flower arrangement with a lot of roses for your grandmother. Be on the lookout for infected paper cuts. Your Complete Scope
This isn't me! What am I?
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The average bank teller loses about $250 every year.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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RBC Real Business Cycle
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