Question

Define deflationary gap.
OR
Give the meaning of deflationary gap.

Answer 1

Explanation:

 When in an economy aggregate demand falls short of aggregate supply at full employment level, the demand is said to be deficient demand and the gap is called deflationary gap.

Answer 2

Answer:

Definition of deflationary gap

: a deficit in total disposable income relative to the current value of goods produced that is sufficient to cause a decline in prices and a lowering of production