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ADJUSTMENT, LONG-RUN AGGREGATE MARKET: Disequilibrium in the long-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the long-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the long-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases long-run equilibrium is restored. Price level changes induce changes in aggregate expenditures but NOT changes in real production. The reason is that long-run aggregate supply is full-employment real production, which is unaffected by the price level.
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ARC ELASTICITY The average elasticity for discrete changes in two variables. The distinguishing characteristic of arc elasticity is that percentage changes are calculated based on the average of initial and ending values of each variable, rather than initial values. Arc elasticity is generally calculated using the midpoint elasticity formula. The contrast to arc elasticity is point elasticity. For infinitesimally small changes in two variables, arc elasticity is the same as point elasticity.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area seeking to buy either a rechargeable flashlight or storage boxes for your computer software CDs. Be on the lookout for small children selling products door-to-door.
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This isn't me! What am I?
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The first U.S. fire insurance company was established by Benjamin Franklin in 1752 in Philadelphia.
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"A leader is most successful when people barely know he exists. When his work is done, his aim fulfilled, his troops will feel they did it themselves. " -- Lao-Tzu, philosopher
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LAN
Locally Asymptotically Normal
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