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INDEPENDENT VARIABLE: A variable that is identified outside the workings of the model. Also termed an exogenous variable, an independent variable is in essence the "input" of the model. It should be compared with an endogenous variable this is the "output" of the model.
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Lesson 8: Market Shocks | Unit 5: Cause and Effect
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Page: 19 of 20
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The sequence of the cause and effect links is an essential element in economic analysis. Six steps for market adjustment: - First, a determinant change always starts the process.
- Second, the determinant change causes a shift in either the demand or the supply curve.
- Third, the shift in the curve causes market disequilibrium, either a shortage or surplus.
- Fourth, the disequilibrium causes the price to change.
- Fifth, the price change causes a change in quantity demanded and quantity supplied.
- Sixth, changes in quantity demand and supplied cause the market equilibrium to be restored.
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LONG-RUN AVERAGE COST CURVE, DERIVATION The long-run average cost curve is the envelope of an infinite number of short-run average total cost curves, with each short-run average total cost curve tangent to, or just touching, the long-run average cost curve at a single point corresponding to a single output quantity. The key to the derivation of the long-run average cost curve is that each short-run average total cost curve is constructed based on a given amount of the fixed input, usually capital. As such, when the quantity of the fixed input changes, the short-run average total cost curve shifts to a new location.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store wanting to buy either an AC adapter for your CD player or storage boxes for your family photos. Be on the lookout for slow moving vehicles with darkened windows.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"Inside the ring or out, ain't nothing wrong with going down. It's staying down that's wrong. " -- Muhammad Ali
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DW
Durbin-Watson
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