An economy can simply be defined as a society that attempts to best satisfy its infinite needs and wants with its available resources (Parry & Kemp,2002). However, people have unlimited wants and needs but the resources are scarce. As such economics is about managing demand and supply within an economy to achieve the best possible satisfaction and to ensure maximum utilization of the resources. Unfortunately it is not as easy as it sounds. There often …showed first 75 words of 1632 total…

…showed last 75 words of 1632 total…Publications PTY LTD, South Perth WA 4.Lewis. P, Garnett. A, Hawtrey. K, Treadgold. M, 2003 Issues, indicators and ideas 3rd Edition. Pearson Education Australia, Frenchs Forest NSW Appendix Expenditure A C+l 1 C+l 2 C Y1 Y Figure 2 Income Y= Equilibrium level Y1= New Equilibrium level C+l 1 = Full employment level C+l 2 = Level of aggregate expenditure Figure 3 Business life cycle Peak Peak Recovery Recession Recovery Trough Recession Trough Time Figure 1 Phillips curve Wage inflation % Unemployment %