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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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OPEN MARKET OPERATIONS: The Federal Reserve System's buying and selling of government securities in an effort to alter bank reserves and subsequently the nation's money supply. These actions, under the direction of the Federal Open Market Committee, are the Fed's number one, most effective, most often used tool of monetary policy. If, for example, the Fed wants to increase the money supply (termed easy money) it buy's government securities. If the Fed chooses to reduce the money supply (called tight money) it sells some government securities. See also | Federal Reserve System | Federal Open Market Committee | money | money supply | open market | bank reserves | excess reserves | monetary policy | tight money | easy money | discount rate | reserve requirements | government securities | banking | money creation | federal funds rate |
Recommended Citation:OPEN MARKET OPERATIONS, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 18, 2025].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: open market operations
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LONG-RUN TREND The pattern of potential real gross domestic product of an economy based on full employment of available resources. The long-run trend is commonly represented as a positively-sloped line in a diagram depicting business-cycle phases. This slope captures the economy's expansion in its production possibilities resulting from increases in the quantity and quality of resources.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time at a flea market wanting to buy either a weathervane with a cow on top or a box of multi-colored, plastic paper clips. Be on the lookout for telephone calls from long-lost relatives.
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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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"A winner is someone who recognizes his God-given talents, works his tail off to develop them into skills, and uses those skills to accomplish his goals. " -- Larry Bird, basketball player
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LRAC
Long Run Average Cost
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