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CHANGE IN INVENTORIES: The increase or decrease in the stocks of final goods, intermediate goods, raw materials, and other inputs that businesses keep on hand to use in production the occur because aggregate expenditures are not equal to aggregate output. Inventory changes play a key role in the Keynesian economics and the analysis of macroeconomic equilibrium. When inventory changes are zero, then aggregate expenditures are equal to aggregate output and there is no reason for the business sector to change the rate of production. Hence this is equilibrium.
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LONG-RUN AGGREGATE SUPPLY CURVE A graphical representation of the long-run relation between real production and the price level, holding all ceteris paribus aggregate supply determinants constant. The long-run aggregate supply curve, abbreviated LRAS, is one of two curves that graphically capture the supply-side of the aggregate market. The other is the short-run aggregate supply curve. The demand-side of the aggregate market is occupied by the aggregate demand curve. The vertical long-run aggregate supply curve captures the independent relation between real production and the price level that exists in the long run.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area trying to buy either a pair of blue silicon oven mitts or a coffee cup commemorating the 2000 Olympics. Be on the lookout for mail order catalogs with hidden messages.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"Success is more a function of consistent common sense than it is of genius. " -- An Wang, industrialist
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EMS
European Monetary System
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