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Aggregate Demand-Aggregate Supply Model
A macroeconomic model that explains price levels and the output levels of an economy through the relationship between aggregate demand and aggregate supply.
Long Run Equilibrium
An economic condition where all factors of production and costs are variable and the market is fully adjusted to any changes.
Short Run Equilibrium
A situation in economics where demand and supply are balanced at current prices within a short timeframe.
Contractionary Gap
A situation where the real GDP is lower than the potential GDP at full employment, indicating underutilized economic resources.
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