at p2 the quantity demanded of goods and services q2

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Unformatted text preview: buying more, and sellers are helping to eliminate the surplus by producing less.) At P2, the quantity demanded of goods and services (Q2) is greater than the quantity supplied (Q1), which means a shortage of goods and services. Thus, the price level rises, people buy fewer goods and services, and producers produce more. The shortage begins to disappear because of the actions of buyers and sellers. (Buyers are helping to eliminate the shortage by buying less, and sellers are helping to eliminate the shortage by producing more.) Only at PE is the quantity of goods and services supplied equal to the quantity of goods and services demanded; both are QE. Aggregate supply and demand are influenced by a number of factors and act as an influence on some other factors. One of the factors that aggregate supply and demand impact is unemployment, which we discuss next. Section 4 Measuring Price Changes and the Unemployment Rate 305 11 (286-309) EMC Chap 11 11/17/05 6:06 PM Page 306 What Is the All-T ime Top-Grossing Movie? ??? S omeone comes up to you and...
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This document was uploaded on 01/16/2014.

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