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AGGREGATE MARKET ANALYSIS: An investigation of macroeconomic phenomena, including unemployment, inflation, business cycles, and stabilization policies, using the aggregate market interaction between aggregate demand, short-run aggregate supply, and long-run aggregate supply. Aggregate market analysis, also termed AS-AD analysis, has been the primary method of investigating macroeconomic activity since the 1980s, replacing Keynesian economic analysis that was predominant for several decades. Like most economic analysis, aggregate market analysis employs comparative statics, the technique of comparing the equilibrium after a shock with the equilibrium before a shock. While the aggregate market model is usually presented as a simply graph at the introductory level, more sophisticated and more advanced analyses often involve a system of equations.
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Lesson 7: Market | Unit 4: Adjustment
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Page: 16 of 22
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- How competitive markets tend to be self-correcting because nonequilibrium prices create shortages and surpluses that move the price back to the equilibrium level.
- How shortages, with quantity demanded greater then quantity supplied, are created for prices below the equilibrium level.
- 3. Why a shortage causes price to increase back to the equilibrium level.
- How surpluses, with quantity demanded less then quantity supplied, are created for prices above the equilibrium level.
- Why a surplus causes price to decrease back to the equilibrium level.
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AD VALOREM TAX A tax specified as a percentage of the price or value of a good, service, asset, or other activity. Ad valorem taxes tend to be broad based, imposed on activities such as income and retail sales. In fact, the two most important ad valorem taxes are income taxes and sales taxes. People pay a percentage of their incomes in income taxes or a percentage or the value of their purchases in sales taxes, regardless of the amount of time spent working or the quantities of goods purchases. An alternative is a per unit tax, with is a tax specified as a percentage of the physical quantity of a good.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either a T-shirt commemorating the first day of winter or software that won't crash your computer. Be on the lookout for small children selling products door-to-door.
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This isn't me! What am I?
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
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"Look at the abundance all around you as you go about your daily business. You have as much right to this abundance as any other living creature. It's yours for the asking." -- Earl Nightingale
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AIC
Akaike's Information Criterion
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