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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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THEORY An empirically verified, interrelated body of general principles, axioms, and assumptions that is used to explain and understand real world phenomena. Theories are the cornerstone of the scientific method. They generate the hypotheses that are verified against real world data. The construction and refinement of theories, accomplished through the hypothesis verification process, is the primary goal of doing science.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads looking to buy either a 200-foot blue garden hose or a video camera with stop action features. Be on the lookout for fairy dust that tastes like salt.
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In the late 1800s and early 1900s, almost 2 million children were employed as factory workers.
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"Do something wonderful; people may imitate it. " -- Albert Schweitzer, theologian, physician
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BA
Bank Acceptance
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