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WAGES, AGGREGATE SUPPLY DETERMINANT: One of several specific aggregate supply determinants assumed constant when the short-run aggregate supply curve is constructed, and that shifts the short-run aggregate supply curve when it changes. An increase in the wages causes a decrease (leftward shift) of the short-run aggregate supply curve. A decrease in the wages causes an increase (rightward shift) of the short-run aggregate supply curve. Other notable aggregate supply determinants include the technology, energy prices, and the capital stock. Wages are an example of a resource price aggregate supply determinant.
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Lesson 17: Money | Unit 1: Money Basics
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Page: 2 of 25
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The notion of general acceptance makes money THE medium of exchange for economic transactions. It must be generally accepted. - Two types of value:
- Value in use (intrinsic value): An item provides satisfaction of wants and needs.
- Value in exchange: An item does not provide satisfaction directly but can be traded for something that does.
- Money may or may not have value in use, but to be a medium of exchange, it must have value in exchange.
Money is an economic lubricant. - Too much money prompts inflationary expansion and too little entices recessionary unemployment.
- The challenge is to maintain the proper balance between too much and too little.
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AGGREGATE DEMAND CURVE A graphical representation of the relation between aggregate expenditures on real production and the price level, holding all ceteris paribus aggregate demand determinants constant. The aggregate demand (AD) curve is one side of the graphical presentation of the aggregate market. The other side is occupied by the long-run aggregate supply curve and/or the short-run aggregate supply curve. The negative slope of the aggregate demand curve captures the inverse relation between aggregate expenditures on real production and the price level. This negative slope is attributable to the interest-rate, real-balance, and net-export effects.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time at a flea market hoping to buy either a coffee cup commemorating the 2000 Olympics or a birthday gift for your grandmother. Be on the lookout for crowded shopping malls.
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." -- Theodore Roosevelt, 26th US president
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TIAC
Thrift Institutions Advisory Council
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