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ASSUMPTIONS, KEYNESIAN ECONOMICS: The macroeconomic study of Keynesian economics relies on three key assumptions--rigid prices, effective demand, and savings-investment determinants. First, rigid or inflexible prices prevent some markets from achieving equilibrium in the short run. Second, effective demand means that consumption expenditures are based on actual income, not full employment or equilibrium income. Lastly, important savings and investment determinants include income, expectations, and other influences beyond the interest rate. These three assumptions imply that the economy can achieve a short-run equilibrium at less than full-employment production.
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LAW OF DIMINISHING MARGINAL RETURNS A principle of short-run production stating that as a firm combines more of a variable input with a fixed input, the marginal product of the variable input eventually declines. This is THE economic principle underlying the analysis of short-run production for a firm. It offers an explanation for the law of supply and the positive slope of the market supply curve.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at an auction trying to buy either a large stuffed brown and white teddy bear or a replacement washer for your kitchen faucet. Be on the lookout for strangers with large satchels of used undergarments.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"I do the best I know how, the very best I can, and I mean to keep doing so until the end. " -- Abraham Lincoln, 16th US president
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JV
Joint Venture
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