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RECOGNITION LAG: In the context of economic policies, the time between a shock to the economy and realization that the shock has occurred. This is one of several policy lags that limit the effectiveness of stabilization policies designed to correct business-cycle fluctuations. This is also one of two inside lags. The other is an implementation lag. Also termed identification lag, the recognition lag emerges due to the time needed to measure economic activity. While the lag is generally positive, it actually can be negative through accurate forecasting techniques. When negative policies can be undertaken to correct a problem before it occurs.
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INDUCED INVESTMENT Business investment expenditures that depend on income or production (especially national income and gross domestic product). That is, changes in income induce changes in investment. Induced investment reflects the observation that the business sector is inclined to reinvest profits (boosted by a growing economy) in capital goods. It is measured by the marginal propensity to invest (MPI) and is reflected by the positive slope of investment line. The alternative to induced investment is autonomous investment, which does not depend on income.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time going from convenience store to convenience store trying to buy either an AC adapter that won't fry your computer or a case for your designer sunglasses. Be on the lookout for high interest rates.
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This isn't me! What am I?
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The wealthy industrialist, Andrew Carnegie, was once removed from a London tram because he lacked the money needed for the fare.
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"Do you want to be safe and good, or do you want to take a chance and be great?" -- Jimmy Johnson, Football Coach
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WACM
Weak Axiom of Cost Minimization
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