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KEYNESIAN MODEL: A macroeconomic model based on the principles of Keynesian economics that is used to identify the equilibrium level of, and analyze disruptions to, aggregate production and income. This model identifies equilibrium aggregate production and income as the intersection of the aggregate expenditures line and the 45-degree line. The Keynesian model comes in three basic variations designated by the number of macroeconomic sectors included--two-sector, three-sector, and four sector. The Keynesian model is also commonly presented in the form of injections and leakages in addition to the standard aggregate expenditures format. This model is used to analyze several important topics and issues, including multipliers, business cycles, fiscal policy, and monetary policy.
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ALLOCATION: The process of distributing resources for the production of goods and services, and of distributing goods and services for the satisfaction of wants and needs and human consumption. This allocation process is an essential part of an economy's effort to address the problem of scarcity. The allocation process involves decisions and choices made by consumers, producers, and governments. While producer and consumer allocation decisions are made primarily through voluntary market exchanges, government allocation decisions are involuntarily made in response to taxes and regulations.A primary focus of allocation, from an economic perspective, is efficiency. Efficiency is achieved when the highest possible level of satisfaction is achieved from available resources. Economists like to see resources allocated in such a way that efficiency is achieved. An allocation is said to be efficient if available resources, goods, and services are distributed according to the economy's highest valued uses. Consider the following examples of allocation choices. - Pollyanna Pumpernickel, a typical consumer, visits the local food market to purchase a loaf of rye bread, a jar of Dijon mustard, a package of Swiss cheese, and a few slices of honey-cured ham. She has decided to prepare a ham and Swiss on rye sandwich for lunch. She could have opted for a cheeseburger and French fries.
- Mona Mallard, the President and CEO of Mona Mallard Duct Tape Industries, responds to a surge in the sales of duct tape by deciding to build a new, highly automated factory on the outskirts of Shady Valley. She could have kept pace with demand by increasing the workforce at her current, less automated factory.
- Victor Thurgood, the honorable Mayor of Shady Valley, initiates a program in which one percent of all sales tax revenue is set aside, or earmarked, for the construction of jogging trails throughout Shady Valley. The city could have used that tax revenue to install a system of severe weather warning sirens.
Each choice affects the production, consumption, and distribution of goods and services.
Recommended Citation:ALLOCATION, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: October 21, 2024]. Check Out These Related Terms... | | | | | | | Or For A Little Background... | | | | | | | | | | And For Further Study... | | | | | | | | | | |
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Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors trying to buy either a wall poster commemorating last Friday (you know why) or a country wreathe. Be on the lookout for strangers with large satchels of used undergarments. Your Complete Scope
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In 1914, Ford paid workers who were age 22 or older $5 per day -- double the average wage offered by other car factories.
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