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Explain the Concepts of Shocks in Aggregate Demand and Aggregate

question 39

Essay

Explain the concepts of shocks in aggregate demand and aggregate supply.


Definitions:

Price Elasticity

A way to gauge how fluctuations in price affect a good's market demand.

Substitutes

Products or services that can replace each other in use, offering consumers alternatives.

Necessity

A necessity is a good or service that is considered essential for basic living and well-being, such as food, water, and shelter.

Price Elasticity

The responsiveness of the quantity demanded of a good to a change in its price.

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