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POTENTIAL REAL GROSS DOMESTIC PRODUCT: The total real output (real gross domestic product) that the economy could produce if resources are fully employed. In other words, the economy is operating ON the production possibilities frontier. Full employment is generally indicated by achieving what is termed the natural unemployment rate, which is an unemployment rate in the neighborhood of about 5%. If the economy is at full employment then actual gross domestic product is equal to potential gross domestic product and the actual unemployment rate is equal to the natural unemployment rate. The macroeconomy is thus living up to its potential, at least in terms of producing wants-and-needs satisfying goods and services.
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SELF CORRECTION, RECESSIONARY GAP The automatic process in which the aggregate market eliminates a recessionary gap created by a short-run equilibrium that is less than full employment through decreases in wages (and other resource prices). The self-correction mechanism is triggered by short-run resource market imbalances that are closed by long-run price flexibility. The self-correction process of the aggregate market also acts to close an inflationary gap with higher wages (and other resource prices).
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages trying to buy either a velvet painting of Elvis Presley or a wall poster commemorating yesterday. Be on the lookout for vindictive digital clocks with revenge on their minds.
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This isn't me! What am I?
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Junk bonds are so called because they have a better than 50% chance of default, carrying a Standard & Poor's rating of CC or lower.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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WFTU
World Federation of Trade Unions
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