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DISCRETIONARY FISCAL POLICY: Explicit changes in government purchases and/or taxes (fiscal policy) that are made with the expressed goal of stabilizing business cycles, reducing unemployment, and/or lowering inflation. While most fiscal policy studied in economics is discretionary, the contrast is with automatic stabilizers, changes in taxes and transfer payments the help stabilize business cycles without explicit government actions. Discretionary monetary policy is a similar type of policy.

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AGGREGATE DEMAND INCREASE, SHORT-RUN AGGREGATE MARKET

A shock to the short-run aggregate market caused by an increase in aggregate demand, resulting in and illustrated by a rightward shift of the aggregate demand curve. An increase in aggregate demand in the short-run aggregate market results in an increase in the price level and an increase in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.

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Today, you are likely to spend a great deal of time at an auction seeking to buy either a coffee cup commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki or a rechargeable battery for your cell phone. Be on the lookout for bottles of barbeque sauce that act TOO innocent.
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Two and a half gallons of oil are needed to produce one automobile tire.
"The tragedy of life is not so much what men suffer, but rather what they miss. "

-- Thomas Carlyle, Historian

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