Relationship To Macroeconomic Equilibrium
In macroeconomics, equilibrium in the goods market occurs when the supply of goods (output) equals the demand for goods (the sum of various types of expenditure—consumer expenditure, government expenditure on goods, net expenditures by people outside the country on the country's exports, fixed investment expenditure on physical capital, and intended inventory investment). If these are indeed equal for a particular time period, there is no unintended inventory investment and there is goods market equilibrium. If they are not equal there is disequilibrium in the goods market, reflected in the presence of positive or negative unintended inventory investment.
Read more about this topic: Inventory Investment
Famous quotes containing the words relationship to, relationship and/or equilibrium:
“Sometimes in our relationship to another human being the proper balance of friendship is restored when we put a few grains of impropriety onto our own side of the scale.”
—Friedrich Nietzsche (1844–1900)
“When a mother quarrels with a daughter, she has a double dose of unhappiness—hers from the conflict, and empathy with her daughter’s from the conflict with her. Throughout her life a mother retains this special need to maintain a good relationship with her daughter.”
—Terri Apter (20th century)
“When a person hasn’t in him that which is higher and stronger than all external influences, it is enough for him to catch a good cold in order to lose his equilibrium and begin to see an owl in every bird, to hear a dog’s bark in every sound.”
—Anton Pavlovich Chekhov (1860–1904)