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A curve connecting the tangency points is called the expansion path because it shows how the input usages expand as the chosen level of output expands. In economics , an expansion path (also called a scale line [ 1 ] ) is a path connecting optimal input combinations as the scale of production expands. [ 2 ]
An economic expansion is an upturn in the level of economic activity and of the goods and services available. It is a finite period of growth, often measured by a rise in real GDP , that marks a reversal from a previous period, for example, while recovering from a recession .
As the target level of output is increased, the relevant isoquant becomes farther and farther out from the origin, and still it is optimal in a cost-minimization sense to operate at the tangency point of the relevant isoquant with an isocost curve. The set of all such tangency points is called the firm's expansion path.
A continuous buildup of toxic assets in the form of subprime mortgages purchased by Lehman Brothers ultimately led to the firm's bankruptcy in September 2008. The collapse of Lehman Brothers is often cited as both the culmination of the subprime mortgage crisis , and the catalyst for the Great Recession in the United States .
Macroeconomics is traditionally divided into topics along different time frames: the analysis of short-term fluctuations over the business cycle, the determination of structural levels of variables like inflation and unemployment in the medium (i.e. unaffected by short-term deviations) term, and the study of long-term economic growth.
Short-term goals. Long-term goals. Vacation. Retirement. Down payment for a car or house. Opening a business. Deposit for a new apartment. Paying for a child’s education
At the same time, the presence of nominal restrictions in price setting behavior might impact the short-term course of inflation. [ 41 ] In recent years economic theory has moved towards the study of economic fluctuation rather than a "business cycle" [ 42 ] – though some economists use the phrase 'business cycle' as a convenient shorthand.
Reopening quickly could boost Trump and the economy. It could also spark catastrophe.