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Liquidity and the closely related notion of flexibility are intuitively understood by economists and others. There is the ease of conversion of an asset at a particular date into something else by means of a market transaction. It is connected with the idea that liquidity increases the set of...
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The chapter is concerned with endogenous processes operating in an economy that brings equilibrium; the most famous and most discussed is the law of demand and supply. If, at prevailing market signals, there is a positive excess demand in a market price, it will rise; if there is a negative...
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