and services in an economy. aggregate expenditures–domestic output approach Determination of the equilibrium by finding the gross domestic product real GDP at which equal aggregate expenditures domestic output. aggregate expenditures schedule A schedule or curve showing the total amount spent for final goods and services at different levels of real GDP. aggregate supply A schedule or curve showing the total quantity of goods and services supplied (produced) at different price levels. aggregate supply shocks Sudden, large changes in resource costs that shift an aggregate supply curve. economy’s agribusiness The portion of the agricultural and food product industries that is dominated by large corporations. Alcoa case A 1945 case in which the courts ruled that the possession of monopoly power, no matter how reasonably that power had been used, was a violation of the antitrust laws; temporarily overturned the applied in the rule of reason U.S. Steel case. allocative efficiency The apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its and or are equal, and at which m arginal cost price marginal benefit the sum of and is maximized. consumer surplus producer surplus Increases in the price level that anticipated inflation (inflation) occur at the expected rate. antitrust laws Legislation (including the and Sherman Act Clayton that prohibits anticompetitive business activities such as Act) bid rigging, monopolization, and price fixing, tying contracts. antitrust policy The use of the to promote a ntitrust laws competition and economic efficiency. appreciation (of the dollar) An increase in the value of the dollar relative to the currency of another nation, so a dollar buys a larger amount of the foreign currency and thus of foreign goods. arbitrage The activity of selling one and buying an identical asset or nearly identical asset to benefit from temporary differences in prices or rates of return; the practice that equalizes prices or returns on similar financial instruments and thus eliminates further opportunities for riskless financial gains. asset Anything of monetary value owned by a firm or individual. asset demand for money The amount of people want to money hold as a this amount varies inversely with the s tore of value; interest rate. A situation where one party to a asymmetric information market transaction has much more information about a product or service than the other. The result may be an under- or overallocation of resources.
and services in an economy. aggregate expenditures–domestic output approach Determination of the equilibrium gross domestic product by finding the real GDP at which aggregate expenditures equal domestic output. aggregate expenditures schedule A schedule or curve showing the total amount spent for final goods and services at different levels of real GDP. aggregate supply A schedule or curve showing the total quantity of goods and services supplied (produced) at different price levels. aggregate supply shocks Sudden, large changes in resource costs that shift an economy’s aggregate supply curve. agribusiness The portion of the agricultural and food product industries that is dominated by large corporations. Alcoa case A 1945 case in which the courts ruled that the possession of monopoly power, no matter how reasonably that power had been used, was a violation of the antitrust laws; temporarily overturned the rule of reason applied in the U.S. Steel case. allocative efficiency The apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its m arginal cost and price or marginal benefit are equal, and at which the sum of consumer surplus and producer surplus is maximized. anticipated inflation Increases in the price level (inflation) that occur at the expected rate. antitrust laws Legislation (including the Sherman Act and Clayton Act) that prohibits anticompetitive business activities such as price fixing, bid rigging, monopolization, and tying contracts. antitrust policy The use of the a ntitrust laws to promote competition and economic efficiency. appreciation (of the dollar) An increase in the value of the dollar relative to the currency of another nation, so a dollar buys a larger amount of the foreign currency and thus of foreign goods. arbitrage The activity of selling one asset and buying an identical or nearly identical asset to benefit from temporary differences in prices or rates of return; the practice that equalizes prices or returns on similar financial instruments and thus eliminates further opportunities for riskless financial gains. asset Anything of monetary value owned by a firm or individual. asset demand for money The amount of money people want to hold as a s tore of value; this amount varies inversely with the interest rate. asymmetric information A situation where one party to a market transaction has much more information about a product or service than the other. The result may be an under- or overallocation of resources.
honors_textbook_glossary.docx