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SELF-CORRECTION, INFLATIONARY GAP: The automatic process through which the aggregate market achieves long-run equilibrium by eliminating an inflationary gap created by short-run equilibrium. With an inflationary gap short-run equilibrium real production is greater than full-employment real production, meaning resource markets have shortages, and in particular labor is overemployed. Self-correction is the process in which these temporary imbalances are eliminated through flexible prices as the aggregate market achieves long-run equilibrium. The key to this process is shifts of the short-run aggregate supply curve caused by changes in wages and other resource prices. The long-run result is lower wages and a decrease in short-run aggregate supply.
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BALANCE OF PAYMENTS A comprehensive set of accounts that tracks the flow of currency and other monetary assets coming in to and going out of a nation. These payments are used for international trade, foreign investments, and other financial activities. The balance of payments is divided into two accounts -- current account (which includes payments for imports, exports, services, and transfers) and capital account (which includes payments for physical and financial assets). A deficit in one account is matched by a surplus in the other account. The balance of trade is only one part of the overall balance of payments set of accounts.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store trying to buy either a 50-foot blue garden hose or a turbo-powered vacuum cleaner. Be on the lookout for slightly overweight pizza delivery guys.
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It's estimated that the U.S. economy has about $20 million of counterfeit currency in circulation, less than 0.001 perecent of the total legal currency.
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"Long-range goals keep you from being frustrated by short-term failures " -- J. C. Penney, Retailer
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SBDC
Small Business Development Center
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