Expectations have an important effect on the economy for two reasons. First, if people and businesses are
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Expectations have an important effect on the economy for two reasons. First, if people and businesses are more positive about the future, they will save and invest more. Second, individuals and firms must make adjustments to shocks—situations in which expectations are unmet and the future does not turn out the way people were expecting. In particular, shocks often imply situations where the quantity supplied of a given good or service does not equal the quantity demanded of that good or service.
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Economics Principles Problems And Policies
ISBN: 9780073511443
19th Edition
Authors: Campbell Mcconnell ,Stanley Brue ,Sean Flynn
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