Question

The equilibrium level of output is less than the full employment level od output in an imaginary economy write its implication and explain two fiscal measures to correct this situation​

Answer 1

Answer:

What Is Below Full Employment Equilibrium?

Below full employment equilibrium is a macroeconomic term used to describe a situation where an economy's short-run real gross domestic product (GDP) is lower than that same economy's long-run potential real GDP. Under this scenario, there is a recessionary gap between the two levels of GDP (measured by the difference between potential GDP and current GDP) that would have been produced had the economy been in long-run equilibrium. An economy in long-run equilibrium is experiencing full employment.