Distinguish between an extension and a contraction and an increase and a decrease in supply and demand. What factors may cause such changes?
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A free market economy is an idealized form of a market economy in which buyers and sellers are permitted to carry out transactions based solely on mutual agreement without interventionism in the form of taxes, subsidies, regulation of government provision of goods and services. In this type of economy, all decisions are made by individuals and firms.
The economy is in equilibrium when income equals output equals expenditure or simply, Injections equal Leakages. On a chart this is represented when the supply and demand curves intersect at the point where supply and demand are equal. The pr…
- Distinguish between an extension and a contraction and an increase and a decrease in supply and demand. What factors may cause such changes?
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