How would the economy know when to stop adjusting

Reference no: EM13689385

If the current income level in a market driven economy is above equilibrium, macroeconomic theory suggests that an automatic adjustment will take place. (a) How does the economy know that it is not in equilibrium and that such an adjustment should take place? (b) What would cause the adjustment to occur? (c) How would the economy know when to stop adjusting?

Reference no: EM13689385

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