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ADJUSTMENT, LONG-RUN AGGREGATE MARKET: Disequilibrium in the long-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the long-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the long-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases long-run equilibrium is restored. Price level changes induce changes in aggregate expenditures but NOT changes in real production. The reason is that long-run aggregate supply is full-employment real production, which is unaffected by the price level.
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MARSHALLIAN CROSS A diagram illustrating the market model, with price measured on the vertical axis and quantity measured on the horizontal axis, with the law of demand represented as a downward-sloping demand curve and the law of supply represented as an upward-sloping supply curve. The derivation of this name comes from the "Marshall" part of noted economist Alfred Marshall, and the intersection or "cross" of the demand and supply curves achieved at that market equilibrium.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale looking to buy either a birthday gift for your mother or a weathervane with a horse on top. Be on the lookout for door-to-door salesmen.
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"It is not the mountain we conquer, but ourselves. " -- Sir Edmund Hillary, Explorer
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TI
Taxable Income
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