excess or deficient use is not good explain please
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The inventory of producers start increasing and profits start shrinking with fall in price levels. This results in low income or output and under employment in an economy. Thus, deficient demand causes deflation and under employment. The economy gets trapped in low income equilibrium.
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Excess Demand The situation of an economy, when Aggregate Demand is more than the Aggregate Supply corresponding to full employment, it is termed as excess demand situation.
Excess demand —> AD > AS, corresponding to full employment level of output or income.
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