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J CURVE: An interesting relationship that exists between the exchange rate for a nation's currency and its balance of trade. In principle, the drop in a nation's exchange rate, or price of currency, makes the currency less expensive to "buy." With "cheaper" currency the price of domestic production is less and the price of foreign stuff is more, causing an increase in exports to other countries and drop in imports coming in from foreign producers. The economy thus moves in the direction away from a trade deficit and toward a trade surplus. However, the first few months after a drop in the exchange rate the balance of trade goes in the other direction, with any existing trade deficit increasing or any trade surplus shrinking. This occurs because the quantities imported and exported don't change in the short run, but the prices do. Because more is paid for the same amount of imported goods and receive less for the same amount of exports, total spending on imports increases, total revenue received from exports declines, and the movement is in the trade deficit direction. Once those quantities start adjusting in the long run, then we see a movement in the direction of a trade surplus.
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CORPORATE PROFITS The total accounting profits received by corporations. Corporate profits are the official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis that measures profit earned by the household sector for supplying entrepreneurship services through corporations, and to some degree capital and land services, too. This is one of five official factor payments making up national income. The other four are compensation of employees, rental income of persons, net interest, and proprietors' income. Corporate profits the second largest factor payment category, usually coming in around 20 to 25 percent of national income.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet looking to buy either a T-shirt commemorating the 2000 Presidential election or a really, really exciting, action-filled video game. Be on the lookout for the last item on a shelf.
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This isn't me! What am I?
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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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"People of mediocre ability sometimes achieve outstanding success because they don't know when to quit. Most men succeed because they are determined to. " -- George Allen, U.S. senator
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AS-AD
Aggregate Supply-Aggregate Demand Model
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