Economics 5E, Arnold, 2000


A
Absolute income equality normative standard, 672
Absolute price, 58
Absolute real economic growth, 385
Abstract, 13
Accounting profit, 474, 695-697
Acreage allotment program, 606-607
Activist
   case for activist monetary policy, 351-353
   defined, 351
Adaptive expectations, 369-370, 375
Advertising
   celebrities and, 413
   monopolistic competition, 555
   perfect competition, 520-521
Aggregate demand, 160-168
   change in quantity demanded of real GDP vs. change in, 162
   changes in, 162, 164
   components of spending, 164-165
   consumption changes and, 166-167
   continued inflation, 328-330
   defined, 160
   effect on money supply, 168
   government purchases and taxes affect on, 234
   Great Depression, 176, 222, 225
   investment changes and, 167
   monetarist's view of, 320
   net export changes and, 167-168
   one-shot inflation, 324-325
   self-regulating economy, 201-202
   in short-run equilibrium, 173-178
Aggregate demand-aggregate supply framework
   economic growth and, 386-388
   equilibrium, 219-220
   Great Depression, 222-223
   Keynesian transmission mechanism, 343
   long-run aggregate supply, 180-181
   monetarism, 321-322
   recessionary gap, 219-220
   short-run aggregate supply, 168-173
   simple quantity theory of money, 315-318
Aggregate demand curve
   defined, 160
   downward slope of, 161-162
   interest rate effect, 161, 163
   international trade effect, 161-162, 163
   real balance effect, 161, 163
Aggregate price, 115
Aggregate supply
   defined, 168
   marginal tax rate cut, effect on, 246-247
   one-shot inflation, 325
   short-run aggregate supply, 168-173
Aggregate supply curve, in Keynesian framework, 224-226
Aging, economic growth and, 45
Agriculture
   farm population, 604
   futures contract, 602-603
   in Great Britain, 605
   high productivity of, 599-600
   income elasticity, 600-601
   price inelasticity, 601-602
   technological advances and, 42
   weather's effect on, 601, 603-604
Agriculture policy
   acreage allotment program, 606-607
   Federal Agriculture Improvement and Reform (FAIR) Act, 604, 609-612
   marketing quota system, 607
   nonrecourse commodity loans, 610
   price support, 605-606
   production flexibility contract payments, 609-610
   restricting supply, 606-607
   soil bank program, 607
   target prices and deficiency payments, 607-608, 610
Airline industry
   deregulation, 591-592
   price of airline seats, 101
Air pollution, 711-714
   fuel efficiency of cars and, 407
   government sets pollution standards, 712
   pollution permits, 713-714
Alchian, Armen, 455
Aluminum Company of America (Alcoa), 529, 576
Amazon, 517
Annual inflation rate, 118
Antidumping argument, for international trade restrictions, 757-758
Antitrust, 574-584
   antitrust acts, 574-575
   concentration ratio, 577-578
   defined, 574
   definition of market, 575-576
   example cases and actions, 579-581
   mergers and, 579
   Microsoft case, 583-584
   network monopolies, 582
Antitrust laws, 574
Apple Computer Corporation, 516
Appreciation of currency, 774
   defined, 167
Arbitrage, 541
   profit, 695-696
Argentina, inflation rate in, 118
Aristotle, 50
Asia, economic crisis in, 749
Assets, 465
Association, 16
Asymmetric information, 716-722
   adverse selection, 720, 722
   defined, 716
   in factor market, 718
   as market failure, 718-719
   moral hazard, 722
   in product market, 717-718
A Theory of Justice (Rawls), 672
Athletes
   college-bound athletes and NCAA regulations, 649
   economic rent and baseball players, 693-694
   wage rates of professional, 633
   as winner-take-all markets, 668-669
AT&T, 592-593
Australia
   economic system of, 46
   inflation rate in, 118
   tax revenue in, 244
   unemployment rate of, 126
Austria, tax revenue in, 244
Automatic fiscal policy, 233
Automobiles
   adverse selection and used car sales, 720
   present value and purchasing, 692
   supply and demand of new and used, 92-93
Autonomous consumption, 213
Autonomous spending, 219-221
Average-cost pricing, 586
Average fixed cost, 481-482
Average-marginal rule, 489-490
Average propensity to consume, 214
Average propensity to save, 215
Average total cost
   average-marginal rule, 490
   price above, 505-507
   in short run, 481-482
Average variable cost, 481-482
   average-marginal rule, 489-490
   of collector's stamps, 511
   price below, 506-507
Axelrod, Robert, 564