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DEMAND-MANAGEMENT POLICIES: Government policies designed to stabilize the economy by changing aggregate demand. The most noted demand-management policies are fiscal and monetary.

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ASSUMPTIONS, CLASSICAL ECONOMICS

Classical economics, especially as directed toward macroeconomics, relies on three key assumptions--flexible prices, Say's law, and saving-investment equality. Flexible prices ensure that markets adjust to equilibrium and eliminate shortages and surpluses. Say's law states that supply creates its own demand and means that enough income is generated by production to purchase the resulting production. The saving-investment equality ensures that any income leaked from consumption into saving is replaced by an equal amount of investment. Although of questionable realism, these three assumptions imply that the economy would operate at full employment.

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PINK FADFLY
[What's This?]

Today, you are likely to spend a great deal of time looking for a downtown retail store trying to buy either a set of serrated steak knives, with durable plastic handles or a pair of blue silicon oven mitts. Be on the lookout for empty parking spaces that appear to be near the entrance to a store.
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Two and a half gallons of oil are needed to produce one automobile tire.
"There comes a time when the mind takes a higher plane of knowledge but can never prove how it got there. "

-- Albert Einstein, physicist

GATT
General Agreementon Tariffs and Trade
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