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Neoclassical economists believe that to help grow the economy, economists should focus on aggregate supply.

What do you mean by aggregate supply?

The amount of all commodities and services produced in an economy at all potential price levels at any one time is known as the aggregate supply. The total amount of goods and services consumed in an economy at all potential price levels at any one time is known as aggregate demand.

There are two primary factors that make up aggregate supply: consumption and saving. The majority of money is used to purchase goods and services, with the remaining amount going toward savings. National income (Y) or aggregate supply (AS) therefore equals the total of consumption expenditures (C) and savings (S).

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