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Effective demand
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{{Short description|Demand in a constrained marketplace}} {{Macroeconomics sidebar}} In [[economics]], '''effective demand''' ('''ED''') in a market is the [[demand]] for a product or service which occurs when purchasers are constrained in a different market. It contrasts with '''notional demand''', which is the demand that occurs when purchasers are not constrained in any other market. In the aggregated market for goods in general, demand, notional or effective, is referred to as [[aggregate demand]]. The concept of '''effective supply''' parallels the concept of effective demand. The concept of effective demand or supply becomes relevant when markets do not continuously maintain [[economic equilibrium|equilibrium]] prices.<ref>[[Hal Varian]], 1977. "Non-Walrasian equilibria," ''[[Econometrica]]'', April, 573-590.</ref><ref>[[Robert W. Clower]], 1965. "The Keynesian Counter-Revolution: A Theoretical Appraisal," in [[Frank Hahn|F.H. Hahn]] and F.P.R. Brechling, ed., ''The Theory of Interest Rates''. Macmillan. Reprinted in Clower, 1987, ''Money and Markets''.pp. [https://books.google.com/books?id=7CQ4AAAAIAAJ&dq=%22The+Keynesian+Counter+Revolution%3A+A+Theoretical+Appraisal%22&pg=RA1-PA34 34-58.]</ref><ref name= Barro>[[Robert Barro]] and [[Herschel Grossman]], 1976. ''Money, Employment, and Inflation'', Cambridge Univ. Press.</ref>
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