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Business Cycles
Economic growth is not a continuous process. Superimposed on the long-term trends are short-term fluctuations in the levels of economic activity and\or in growth rates. These upswings and downswings are of varying duration and intensity and are referred to as 'cycles'. Governments attempt to smooth out these fluctuations with the use of contra-cyclical monetary and fiscal policies. The latest developments in macroeconomic thought regard business cycles as the central (if not the only) problem of macroeconomics.
The economy of Mainland has the following aggregate and aggregate supply schedules: Real GDP Demanded Real GDP Supplie
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Explain the adjustment to the new equilibrium price from an increase in demand.
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use a numerical example to illustrate how credit multiplier works
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