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ADJUSTMENT, SHORT-RUN AGGREGATE MARKET: Disequilibrium in the short-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the short-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the short-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases short-run equilibrium is restored. You might want to compare adjustment, long-run aggregate market. Price level changes induce changes in both aggregate expenditures and real production. Unlike the long-run aggregate market, changes in the price level can induce changes in short-run aggregate supply, making it greater or less than full-employment real production.
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LONG-RUN AGGREGATE SUPPLY The total (or aggregate) real production of final goods and services available in the domestic economy at a range of price levels, during a period of time in which all prices, especially wages, are flexible, and have achieved their equilibrium levels. Long-run aggregate supply, commonly abbreviated LRAS, is one of two aggregate supply alternatives, distinguished by the degree of price flexibility. The other is short-run aggregate supply. Long-run aggregate supply is combined with aggregate demand, and often short-run aggregate supply, in the long-run aggregate market (or AS-AD) analysis used to analyze economic growth, business-cycle instability, unemployment, inflation, government stabilization policies, and related macroeconomic topics.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through mail order catalogs looking to buy either a battery-powered, rechargeable vacuum cleaner or a remote controlled World War I bi-plane. Be on the lookout for crowded shopping malls.
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This isn't me! What am I?
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A communal society, a prime component of Karl Marx's communist philosophy, was advocated by the Greek philosophy Plato.
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"Whenever you fall, pick up something. " -- Oswald Avery, scientist
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FHLBB
Federal Home Loan Bank Board
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