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EQUILIBRIUM, LONG-RUN AGGREGATE MARKET: The state of equilibrium that exists in the long-run aggregate market when real aggregate expenditures are equal to full employment real production with no imbalances to induce changes in the price level or real production. The opposing forces of aggregate demand (the buyers) and long-run aggregate supply (the sellers) exactly offset each other. Equilibrium in the long-run aggregate market also involves simultaneous equilibrium in the aggregated financial and resource markets. Long-run price flexibility ensures that all three aggregate markets are in equilibrium.
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AGGREGATE MARKET SHOCKS Disruptions of the equilibrium in the aggregate market (or AS-AD model) caused by shifts of the aggregate demand, short-run aggregate supply, or long-run aggregate supply curves. Shocks of the aggregate market are associated with, and thus used to analyze, assorted macroeconomic phenomena such as business cycles, unemployment, inflation, stabilization policies, and economic growth. The specific analysis of aggregate market shocks identifies changes in the price level (GDP price deflator) and real production (real GDP). Changes in the price level and real production have direct implications for the unemployment rate, the inflation rate, national income, and a host of other macroeconomic measures.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway hoping to buy either a bottle of blackcherry flavored spring water or a travel case for you toothbrush. Be on the lookout for jovial bank tellers.
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There were no banks in colonial America before the U.S. Revolutionary War. Anyone seeking a loan did so from another individual.
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"Nothing great has ever been achieved except by those who dared believe that something inside them was superior to circumstances. " -- Bruce Barton, Advertising executive
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CJE
Canadian Journal of Economics
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