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DISCRETIONARY POLICY: Government policies that involve explicit actions designed to achieve specific goals. A common type of discretionary policy is that designed to stabilize business cycles, reduce unemployment, and lower inflation, through government spending and taxes (fiscal policy) or the money supply (monetary policy). Discretionary policies are also termed activist policies because they involve active decisions by government. A contrast to discretionary policy is automatic stabilizers that help stabilize business cycles without explicit government actions.

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AGGREGATE DEMAND AND MARKET DEMAND

The aggregate demand curve, or AD curve, has similarities to, but differences from, the standard market demand curve. Both are negatively sloped. Both relate price and quantity. However, the market demand curve is negatively sloped because of the income and substitution effects and the aggregate demand curve is negatively sloped because of the real-balance, interest-rate, and net-export effects.

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GRAY SKITTERY
[What's This?]

Today, you are likely to spend a great deal of time watching infomercials wanting to buy either clothing for your kitty cats or a set of luggage without wheels. Be on the lookout for infected paper cuts.
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This isn't me! What am I?

Al Capone's business card said he was a used furniture dealer.
"Plans are only good intentions unless they immediately degenerate into hard work."

-- Peter Drucker, management consultant

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