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Using the Concepts of Aggregate Demand and Aggregate Supply, Explain

question 93

Essay

Using the concepts of aggregate demand and aggregate supply, explain how the economy reaches an equilibrium level of real GDP and price level.


Definitions:

Minimum Amount

The smallest quantity or value permitted or possible in a given set of circumstances.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Liquidation

The process of winding up a company's financial affairs by selling off its assets to pay off debts.

Election

The process through which individuals select their leaders or decide on matters of public policy through voting in a democratic society.

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