Aggregate Deman2

Aggregate Deman2 - Aggregate Demand The combined demand of...

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Aggregate Demand - The combined demand of all buyers in a market. Budget Constraint - The outermost boundary of possible purchase combinations that a person can make, given how much money they have and the price of the goods in consideration. Buyer - Someone who purchases goods and services from a seller for money. Competition - In a market economy, competition occurs between large numbers of buyers and sellers who vie for the opportunity to buy or sell goods and services. The competition among buyers means that prices will never fall very low, and the competition among sellers means that prices will never rise very high. This is only true if there are so many buyers and sellers that no one individual has a significant impact on the market's equilibrium. Complementary Good - A good is called a complementary good if the demand for the good increases with demand for another good. One extreme example: right shoes are complementary goods for left shoes. Demand
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