4.4 - Some More Concepts
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Practice Questions
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Define equilibrium output.
💡 Hint: Think about the balance of demand and supply.
What does deficient demand refer to?
💡 Hint: Consider situations where there is unemployment.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does equilibrium output indicate?
💡 Hint: Focus on the definition of equilibrium.
True or False? Deficient demand can lead to unemployment.
💡 Hint: Think about how demand influences production.
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Challenge Problems
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Imagine an economy where the equilibrium output is measured at $1 trillion. However, due to a global recession, demand drops and leads to an equilibrium output of only $800 billion. Analyze the potential implications this might have on unemployment and inflation.
💡 Hint: Consider the relationship between demand changes and employment levels.
With an economy facing excess demand, how would an increase in consumer savings impact equilibrium output in the short run? Develop your answer with economic rationale.
💡 Hint: Think about the connection between saving behavior and overall demand.
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