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DEMAND PRICE: The maximum price that buyers would be willing and able to pay for a given quantity of a good. The emphasis here is on maximum. As a general rule buyers have an upper limit to the price that they would be willing to pay for a good. As an upper limit, they would gladly go lower.
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Lesson 17: Money | Unit 4: Money's History
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Page: 20 of 25
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Fiat money has little or no value in use compared to value in exchange. The value in exchange of fiat money is under control of an authority, usually government. The transition: - First: Paper currency was backed by metal stored in a secure location. The paper could be traded for equivalent amounts of silver or gold.
- Second: Because no one traded paper currency for metal, metal wasn't needed to back the paper. They just need a paper currency-to-metal exchange rate.
- Third: Authorities stopped fixing the currency-to-metal exchange price. Paper currency was valuable based on the ability to purchase goods.
A two-edged sword: - Authority acquires the ability to control money and also the responsibility.
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AGGREGATE SUPPLY DECREASE, SHORT-RUN AGGREGATE MARKET A shock to the short-run aggregate market caused by a decrease in aggregate supply, resulting in and illustrated by a leftward shift of the short-run aggregate supply curve. A decrease in aggregate supply in the short-run aggregate market results in an increase in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.
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WHITE GULLIBON [What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet looking to buy either storage boxes for your income tax returns or an AC adapter for your CD player. Be on the lookout for the happiest person in the room. Your Complete Scope
This isn't me! What am I?
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More money is spent on gardening than on any other hobby.
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"Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost. " -- John Quincy Adams, 6th US president
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EEH Explorations in Economic History
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