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NORMATIVE ECONOMICS: The branch of economics that states the way the economy should operate. A normative statement is based on values and can be proved neither right or wrong. While positive economics seeks to explain the way it is, normative economics, the policy side of economics, seeks to prescribe the way it should be. Normative economics is used to recommend ways to change the world, to improve it, and to make it a better place for both man and beast.
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REAL-BALANCE EFFECT A change in aggregate expenditures on real production made by the household, business, government, and foreign sectors that results because a change in the price level alters the purchasing power of money. This is one of three effects underlying the negative slope of the aggregate demand curve associated with a movement along the aggregate demand curve and a change in aggregate expenditures. The other two are interest-rate effect and net-export effect. The real-balance effect is somewhat analogous to the income effect underlying the negative slope of the market demand curve.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center wanting to buy either a flower arrangement for your aunt or a birthday greeting card for your uncle. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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This isn't me! What am I?
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"Our vision controls the way we think and, therefore, the way we act . . . The vision we have of our jobs determines what we do and the opportunities we see or don't see. " -- Charles Koch, executive
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S&D
Supply and Demand
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