How to maintain balance between aggregate suppy and demand

Reference no: EM13185849

Once the city is deemed to be operating a capacity the reduction of monetary stimulus will be required to maintain a balance between the aggregate suppy and demand of the output to keep infaltion on target in the area. Since aggregate demand is what the consumer wishes to buy in comparison to what the area under intrest is producing at varing price levels. One of the main supply areas in Knoxille is the resturant industry, since we have more resturants per capita than cities twice this size. This industry not only utilized food supplies from this and surround areas it also provides gainful employment. Since this industry is not limited to the numbers allowed in the city this can drive prices down, due to the competive nature of the market. The city should limit the amount of new resturants coming to the area to keep growth on target.

Reference no: EM13185849

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