SHORT-RUN AGGREGATE MARKET: A macroeconomic model relating the price level and real production under the assumption that SOME prices inflexible, especially resource prices. The short-run aggregate market isolates the interaction between aggregate demand and short-run aggregate supply. The key assumption of this model is that SOME prices, especially resource prices, are flexible. The primary result of this model is that the economy can achieve short-run equilibrium at real production that is either greater than or less than full-employment. See also | short run | aggregate market | price level | real production | model | short-run aggregate supply | inflexible prices | long-run aggregate market | aggregate demand | resource prices | short-run equilibrium | full employment | business cycles | aggregate output | unemployment | inflation | stabilization policies |
