Macroeconomic equilibrium
Definition. Macroeconomic equilibrium occurs where aggregate demand equals aggregate supply, so total planned spending in the economy equals total planned output. At this point there is no tendency for the general price level or the level of real national output to change.
It is shown by the intersection of the aggregate demand and aggregate supply curves, which jointly determine the equilibrium price level and real national income. Shifts in either curve move the economy to a new equilibrium.
This term belongs to Aggregate Demand and Aggregate Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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