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ADJUSTMENT, SHORT-RUN AGGREGATE MARKET: Disequilibrium in the short-run aggregate market induces changes in the price level that restore equilibrium. If the price level is above the short-run equilibrium price level, economy-wide product market surpluses cause the price level to fall. If the price level is below the short-run equilibrium price level, economy-wide product market shortages cause the price level to rise. In both cases short-run equilibrium is restored. You might want to compare adjustment, long-run aggregate market. Price level changes induce changes in both aggregate expenditures and real production. Unlike the long-run aggregate market, changes in the price level can induce changes in short-run aggregate supply, making it greater or less than full-employment real production.
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UNSTABLE EQUILIBRIUM Equilibrium that is not restored if disrupted by an external force. Few economic models have an equilibrium that is unstable, reflecting the observation that the real world adapts to changes and maintains a fair degree of stability. However, there are situations where an unstable equilibrium more accurately reflects economic phenomena. The alternative to an unstable equilibrium is a stable equilibrium.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex looking to buy either a wall poster commemorating the 2000 Olympics or a flower arrangement with a lot of roses for your grandmother. Be on the lookout for fairy dust that tastes like salt.
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General Electric is the only stock from the original 1896 Dow Jones Industrial Average remaining in the current index.
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"God gives talent; work transforms talent into genius. " -- Anna Pavlova, ballerina
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