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Business Economics Paper | Stable Equilibrium

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Added on  2019-11-20

Business Economics Paper | Stable Equilibrium

   Added on 2019-11-20

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Running head: BUSINESS ECONOMICSBusiness EconomicsName of the StudentName of the UniversityAuthor note
Business Economics Paper | Stable Equilibrium_1
1BUSINESS ECONOMICSTable of ContentsIntroduction......................................................................................................................................2Economic stability...........................................................................................................................2Stability for Australian Economy....................................................................................................4GDP.............................................................................................................................................5Price Level...................................................................................................................................6Instrument used for stabilization.....................................................................................................6Conclusion.......................................................................................................................................7References........................................................................................................................................9
Business Economics Paper | Stable Equilibrium_2
2BUSINESS ECONOMICSIntroduction Free market equilibrium is obtained where market demand and market supply conditionmatches with each other. The equilibrium is said to be a stable equilibrium if any changes fromequilibrium condition automatically restores equilibrium. Without any external forces demandand supply, forces adjust to bring equilibrium in the market. The paper explains a stableequilibrium using simple tools of demand and supply. The implication of stabilization for asingle market as well as that for the whole economy is considered. Australia is a capitalisteconomy, relying largely on market economy. The economy manages to maintain a stable state.However, government intervenes to ensure stability if necessary. Economic stability Figure 1: Stability in Equilibrium (Source: As created by the Author)
Business Economics Paper | Stable Equilibrium_3

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