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INFLATION CAUSES: Inflation is a persistent increase in the economy's average price level. The two basic types (or causes) of inflation: demand-pull inflation and cost-push inflation. Demand-pull inflation, as the name clearly indicates, results when economy-wide shortages are created by increases in aggregate demand. Cost-push inflation results when an economy-wide shortages are created by decreases in aggregate supply, which are so named because they are more often than not triggered by increases in production cost.
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Lesson 7: Market Equilibrium | Unit 1: The Exchange
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Page: 3 of 22
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Competition (especially our fourth rule of competition) brings out the best among buyers and sellers, that is, efficient use of resources.- Competition among sellers forces them to supply the most wanted products at the lowest resource cost.
- Competition among buyers forces them to spend their limited incomes on the most satisfying goods.
- Less competition among sellers than among buyers lets the sellers charge higher prices.
- Less competition among buyers than among sellers lets the buyers pay lower prices.
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RESOURCE ALLOCATION The process of distributing resources for the production of goods and services which are then distributed for the satisfaction of wants and needs and human consumption. This is also commonly referred to by the single word "allocation." The resource allocation process is an essential part of an economy's effort to address the problem of scarcity
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area hoping to buy either an instructional DVD on learning to the play the oboe or a small, foam rubber football. Be on the lookout for attractive cable television service repair people.
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This isn't me! What am I?
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Two and a half gallons of oil are needed to produce one automobile tire.
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"If you don't know where you are going, any road will get you there." -- Lewis Carroll, writer
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PIH
Permanent Income Hypothesis
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