aggregate supply

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The total supply of all the goods and services in an economy. J. M. Keynes made aggregate demand the focus of macroeconomics; however, since the 1970s many economists have questioned the importance of aggregate demand in determining the health of an economy, suggesting instead that governments should concentrate on establishing conditions to encourage the supply of goods and services. This could entail deregulation, encouraging competition, and removing restrictive practices in the labour market.

Subjects: Economics — Business and Management.

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