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LIQUIDITY: The ease of converting an asset into money (either checking accounts or currency) in a timely fashion with little or no loss in value. Money is the standard for liquidity because it is, well, money and no conversion is needed. Other assets, both financial and physical have varying degrees of liquidity. Savings accounts, certificates of deposit, and money market accounts are highly liquid. Stocks, bonds, and are another step down in liquidity. While they can be "cashed in," price fluctuations, brokerage fees, and assorted transactions expenses tend to reduce their money value. Physical assets, like houses, cars, furniture, clothing, food, and the like have substantially less liquidity.
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Lesson 8: Market Shocks | Unit 4: Double Shifts
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Page: 17 of 20
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- How the market equilibrium can be disrupted by simultaneous shifts in the demand and supply curves.
- The four possible double shifts in the market: more demand and less supply, more demand and more supply, less demand and less supply, and less demand and more supply.
- That an increase in demand and an increase in supply results in an increase in quantity and an indeterminant change in price.
- That an increase in demand and a decrease in supply results in an increase in price and an indeterminant change in quantity.
- That a decrease in demand and a decrease in supply results in a decrease in quantity and an indeterminant change in price.
- That a decrease in demand and an increase in supply results in an decrease in price and an indeterminant change in quantity.
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PERFECT COMPETITION, EFFICIENCY Perfect competition is an idealized market structure that achieves an efficient allocation of resources. This efficiency is achieved because the profit-maximizing quantity of output produced by a perfectly competitive firm results in the equality between price and marginal cost. In the short run, this involves the equality between price and short-run marginal cost. In the long run, this is seen with the equality between price and long-run marginal cost at the minimum efficient scale of production.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites looking to buy either a how-to book on surfing the Internet or a computer that can play music and burn CDs. Be on the lookout for letters from the Internal Revenue Service.
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This isn't me! What am I?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"To sit back and let fate play its hand out, and never influence it, is not the way man was meant to operate." -- John Glenn, astronaut, U.S. senator
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LRD
Longitudinal Research Database
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