Exhibit 14A-6 Aggregate demand and supply model
-As shown in Exhibit 14A-6,the economy's point of short-run equilibrium,given by the shift of the aggregate demand curve from AD₁ to AD₂,is:
Definitions:
Lobby
The act of attempting to influence the decisions of government officials, typically by special interest groups.
Binding Price Ceiling
A maximum price set by the government below the equilibrium price, preventing suppliers from raising the price above it, leading to shortages.
Surplus
The situation in which the quantity of a good supplied exceeds the quantity demanded, often resulting in downward pressure on prices.
Price Ceiling
A legally established maximum price that can be charged for a good or service, aimed at preventing prices from becoming too high.
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