macroeconomics

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…point M than point K. Because of aggregate demand * aggregate supply we have excess demand in goods market. This shows that if a point is selected in quadrant IV there is excess supply in money market and excess demand in goods market. If we put the results in a table; Quadrant Money Market Goods Market I Excess Supply Excess Supply II Excess Demand Excess Supply III Excess Demand Excess Demand IV Excess Supply Excess Demand