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REAL-BALANCE EFFECT: A change in aggregate expenditures on real production made by the household, business, government, and foreign sectors that results because a change in the price level alters the purchasing power of money. This is one of three effects underlying the negative slope of the aggregate demand curve associated with a movement along the aggregate demand curve and a change in aggregate expenditures. The other two are interest-rate effect and net-export effect.
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LONG RUN, MACROECONOMICS In terms of the macroeconomic analysis of the aggregate market, a period of time in which all prices, especially wages, are flexible, and are able to achieve equilibrium levels. This is one of two macroeconomic time designations; the other is the short run. Long-run wage and price flexibility means that ALL markets, including resource markets and most notably labor markets, are in equilibrium, with neither surpluses nor shortages. Wage and price flexibility and the resulting resource market equilibria are the reason for the vertical long-run aggregate supply curve.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet hoping to buy either a rotisserie oven that can also toast bread or a flower arrangement in a coffee cup for your father. Be on the lookout for high interest rates.
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Lombard Street is London's equivalent of New York's Wall Street.
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"It is the mark of an educated mind to be able to entertain a thought without accepting it." -- Aristotle
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BOP
Balance of Payments
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