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AGGREGATE DEMAND DETERMINANT: A ceteris paribus factor that affects aggregate demand, but which is assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures.

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Lesson 20: Oligopoly | Unit 1: Intro Page: 4 of 24

Topic: Structure And Behavior <=PAGE BACK | PAGE NEXT=>

  • Structure: The basic structure of oligopoly rests with a small number of relatively large firms.

  • The two key structural considerations of this characteristic are:

    • Concentration
    • Entry Barriers.

  • Behavior: Markets with a small number of large firms behave differently than monopoly with a single firm or monopolistic competition with a large number of small firms.

  • Some of the more noted behavioral traits include:

    • Interdependence
    • Price Rigidity
    • Nonprice Competition
    • Price Leadership
    • Collusion
    • Mergers


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INFLATION

A persistent increase in the average price level in the economy. It is measured by the inflation rate, the annual percentage change in a price index such as the Consumer Price Index (CPI) or GDP price deflator. Inflation is the most common phenomenon associated with the price level. Two related phenomena are deflation, a decrease in the price level, and disinflation, a decrease in the inflation rate. Inflation is one of two key macroeconomic problems. The other is unemployment.

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Today, you are likely to spend a great deal of time at the confiscated property police auction trying to buy either a coffee cup commemorating yesterday or a replacement remote control for your television. Be on the lookout for celebrities who speak directly to you through your television.
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Paper money used by the Commonwealth of Massachusetts prior to the U.S. Revolutionary War, which was issued against the dictates of Britain, was designed by patriot and silversmith, Paul Revere.
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