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RECESSIONARY GAP, KEYNESIAN MODEL: The difference between equilibrium aggregate production achieved in the Keynesian model and full-employment aggregate production that occurs when equilibrium aggregate production is less than full-employment aggregate production. A recessionary gap, also termed a contractionary gap, is associated with a business-cycle contraction. The prescribed Keynesian remedy for a recessionary gap is expansionary fiscal policy. This is one of two alternative output gaps that can occur when equilibrium generates production that differs from full employment. The other is an inflationary gap.
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Lesson 10: Utility and Demand | Unit 2: A Simple Choice
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Page: 6 of 21
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Topic:
Demand For A Good
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- Demand captures changes in quantity demanded resulting from changes in the price.
Let's take stock of what has happened:- The price of beach admission has declined from $1 per hour to $0.50 per hour.
- The quantity demanded of beach time has increased from 2 hours to 4 hours.
- Total utility has increased from 22 utils to 36 utils because a larger quantity has been consumed.
- Marginal utility has decreased from 10 utils to 6 utils, again because a larger quantity has been consumed and the law of diminishing marginal returns has been at work.
- In conclusion, the lower price of admission has allowed me to purchase a larger quantity of beach time with a given income.
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SERVICES, CONSUMPTION Personal consumption expenditures on activities that provide direct satisfaction of wants and needs without the production of tangible goods. Common examples are information, entertainment, and education. This is one of three categories of personal consumption expenditures in the National Income and Product Accounts maintained by the Bureau of Economic Analysis. The other two are durable goods and nondurable goods. Services are about 60 percent of personal consumption expenditures and 40 percent of gross domestic product.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at a garage sale wanting to buy either a 50 foot extension cord or a combination CD player, clock radio, and telephone (with answering machine). Be on the lookout for pencil sharpeners with an attitude.
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This isn't me! What am I?
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A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
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"For a writer, published works are like fallen flowers, but the expected new work is like a calyx waiting to blossom." -- Cao Yu, Playwright
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LS
Least Squares
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