Economy, asked by Sharinii, 3 months ago

Explain the working of adjustment mechanism when
AD<Y


Answers

Answered by saleha55510
2

Explanation:

This process of adjustment mechanism is explained below graphically. In the figure, AD and AS represent the aggregate demand and aggregate supply curves. ... Due to the excess demand, the producers draw down their inventories and hire more factors of production. This results in an increase in production and employment.

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