contraction

Examples of contraction in the following topics:

• Social Interaction and Technology

  • An agreement between two individuals or agents is a contract.
  • It is a contract between two people.
  • The form of that contract is influenced by commonly held social values and laws of a society.
  • The market provides the structure that allows two parties to negotiate and enter a contract.
  • The market also uses the willingness of each person involved in the contract to constrain the alternatives open to the other.

• Growth in the Rest of the World

  • The purchasing power expanded for 145 markets and contracted for two.
  • The economic output expanded for 122 countries and contracted for 29.
  • The economic output for 176 countries expanded and four contracted.
  • The economic output of 127 countries contracted.
  • The purchasing power contracted for 79 markets.

• Commodities and Other Futures

  • Commodity "futures" are contracts to buy or sell certain certain goods at set prices at a predetermined time in the future.
  • Overall, futures activity rose to 417 million contracts in 1997, from 261 million in 1991.
  • Hedgers are business firms, farmers, or individuals that enter into commodity contracts to be assured access to a commodity, or the ability to sell it, at a guaranteed price.
  • They are lured to commodity trading by the prospect of making huge profits on small margins (futures contracts, like many stocks, are traded on margin, typically as low as 10 to 20 percent on the value of the contract).

• The Business Cycle: Definition and Phases

  • From a conceptual perspective, the business cycle is the upward and downward movements of levels of GDP (gross domestic product) and refers to the period of expansions and contractions in the level of economic activities (business fluctuations) around a long-term growth trend .
  • Business cycles are identified as having four distinct phases: expansion, peak, contraction, and trough.
  • Following a peak an economy, typically enters into a correction which is characterized by a contraction, growth slows, employment declines (unemployment increases), and pricing pressures subside.
  • The slowing ceases at the trough and at this point the economy has hit a bottom from which the next phase of expansion and contraction will emerge.
  • The phases of a business cycle follow a wave-like pattern over time with regard to GDP, with expansion leading to a peak and then followed by contraction leading to a trough.

• Market Exchange and Efficiency

  • Individuals voluntarily contract among themselves.
  • The benefits and cost associated with the production or consumption of any good falls only on the agents engaged in the contract or transaction.

• Principle-Agent Problem

  • Conflicts usually exist when contracts are written due to uncertainty and risk taken on by both parties.
  • In order to minimize and control economic conflict, principals and agents design and agree on a contract.
  • The linear model is used to determine incentive compensation in a contract: w = a + b(e + x + gy).
  • A business contract creates a straightforward connection between agent performance and profitability.

• Introduction to Market Exchange as an Allocative Mechanism

  • Market exchange is a contract or agreement between the parties to the transaction.
  • These agreements or contracts may be implied or explicit, formal or informal.
  • An individual who fails to comply with the terms of the contract or exchange may by sued in a system of courts that has the authority to enforce the exchange.
  • A major advantage of market exchange as an allocative mechanism is that once you have found others to contract or exchange with, each actor only needs information about their own preferences and what they are willing and able to do.

• Recessions

  • A recession is a business cycle contraction; a general slowdown in economic activity.
  • In economics, a recession is a business cycle contraction; a general slowdown in economic activity.

• Managing the Business Cycle

  • These fluctuations occur around a long-term growth trend, and typically involve shifts over time between periods of relatively rapid economic growth (an expansion or boom), and periods of relative stagnation or decline (a contraction or recession).
  • The economy moves through expansion and contraction on a routine basis; policy mechanisms allow for smoother transitions and soften landings.

• Types of Private Solutions

  • Business mergers or contracts in the self interest of relevant parties: Two businesses that offer positive externalities to each other can merge or enter into a contract that makes both parties better off .