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LRAC CURVE: The common abbreviation for the long-run average cost curve, which is a curve depicting the per unit cost of producing a good or service in the long run when all inputs are variable. The long-run average cost curve can be derived in two ways. On is to plot long-run average cost, which is, long-run total cost divided by the quantity of output produced. at different output levels. The more common method, however, is as an envelope of an infinite number of short-run average total cost curves. Such an envelope is base on identifying the point on each short-run average total cost curve that provides the lowest possible average cost for each quantity of output. The long-run average cost curve is U-shaped, reflecting economies of scale (or increasing returns to scale) when negatively-sloped and diseconomies of scale (or decreasing returns to scale) when positively sloped. The minimum point (or range) on the LRAC curve is the minimum efficient scale.
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RECOGNITION LAG The time lag that it takes to identify and document the existence of an economic problem that might require government action. The recognition lag arises because it takes time to collect and analyze economic data; to verify that an actual problem exists. This "inside lag" is one of four policy lags associated with monetary and fiscal policy. The other two "inside lags" are decision lag and implementation lag, and one "outside lag" is implementation lag. All four policy lags can reduce the effectiveness of business-cycle stabilization policies and can even destabilize the economy.
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WHITE GULLIBON [What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club seeking to buy either a black duffle bag with velcro closures or any book written by Isaac Asimov. Be on the lookout for the happiest person in the room. Your Complete Scope
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Anyone who has never made a mistake has never tried anything new. " -- Albert Einstein, physicist
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JFE Journal of Financial Economics
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