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An Increase in Aggregate Demand When the Economy Is Operating

question 45

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An increase in aggregate demand when the economy is operating ________ is likely to result in an increase in the overall price level and ________ in output.


Definitions:

Reserve Requirement

A regulation that sets the minimum amount of reserves a bank must hold against customer deposits, intended to ensure bank liquidity.

Primary Market

The financial market where new securities, such as stocks and bonds, are initially issued and sold to investors.

Secondary Market

A financial market where previously issued securities and financial instruments such as stocks, bonds, options, and futures are bought and sold.

National Stock Exchange

A major securities exchange where stocks and other financial securities are bought and sold.

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