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SELF-CORRECTION, RECESSIONARY GAP: The automatic process through which the aggregate market achieves long-run equilibrium by eliminating a recessionary gap created by short-run equilibrium. With a recessionary gap short-run equilibrium real production is less than full-employment real production, meaning resource markets have surpluses, and in particular labor is unemployed. Self-correction is the process in which these temporary imbalances are eliminated through flexible prices as the aggregate market achieves long-run equilibrium. The key to this process is shifts of the short-run aggregate supply curve caused by changes in wages and other resource prices. The long-run result is lower wages and an increase in short-run aggregate supply.
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TAX INCIDENCE The portion of a tax paid by each side of a market based on differences in the pre-tax equilibrium price and the after-tax demand price and supply price. Because a tax drives a wedge between demand price and supply price, the incidence or burden of a tax typically falls on both buyers and sellers. How much each side pays depends on the relative price elasticity of demand and supply. Buyers pay the entire tax only in the case of a perfectly elastic supply or perfectly inelastic demand. Sellers pay the entire tax only in the case of a perfectly elastic demand or perfectly inelastic supply.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club looking to buy either a how-to book on meeting people or clothing for your pet iguana. Be on the lookout for fairy dust that tastes like salt.
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A half gallon milk jug holds about $50 in pennies.
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"The man who does not read good books has no advantage over the man who cannot read them. " -- Mark Twain
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ISDA
International Swaps and Derivatives Association
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