In a competitive market, demand for and supply of a good or service determine the equilibrium price.
The law of demand
Markets have two agents: buyers and sellers. Demand represents the buyers in a market. Demand is a description of all quantities of a good or service that a buyer would be willing to purchase at all prices.
According to the law of demand, this relationship...
Key points
The aggregate demand/aggregate supply, or AD/AS, model is one of the fundamental tools in economics because it provides an overall framework for bringing economic factors together in one diagram.
We can examine long-run economic growth using the AD/AS model, but the factors that determine the speed of this long-term economic growth rate do not appear directly in...
A financial plan is always drawn up taking into account financial goals - this is a kind of guiding star that helps to take care of your capital.
After all, if you understand that buying a device that will soon gather dust to the sidelines with others will postpone the achievement of your goals, then, most likely, the desire to make rash purchases will be an order of magnitude...
Key points
Price level is measured by constructing a hypothetical basket of goods and services—meant to represent a typical set of consumer purchases—and calculating how the total cost of buying that basket of goods increases over time.
The rate of inflation is measured as the percentage change between price levels over time....
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