When the total supply of goods and services in an economy exceeds the total demand for them, resulting in a surplus. This can lead to decreased prices and production levels.
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Surplus: A situation where the quantity supplied exceeds the quantity demanded at a given price.
Deflation: A sustained decrease in the general price level of goods and services in an economy.
Contractionary fiscal policy: Government measures aimed at reducing aggregate demand to control inflation by decreasing government spending or increasing taxes.
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