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Define the aggregate price level in the macroeconomics.
Aggregate Price Level:
A nominal measure is a measure which has not been adjusted for modifications into prices over time.
A real measure is a measure which has been adjusted for modifications into prices over time.
The modifications in real wages are a superior measure of changes into employees’ purchasing power than the modification into nominal wages. The aggregate price level is the whole level of prices into the economy.
Assume that there are two types of consumers (in equal numbers). They have the following two inverse demand functions (coming from zero-income effect demand functions): Type A : p
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