Question

waht happens when ad>as​

Answer 1

Explanation:

when as is less than Aggregate supply,then the planned inventory rises above and desired level . to clear the unwanted increases in inventory ,firms plan to reduce the production output till Aggregate demand becomes equal to Aggregate supply

When Aggregate demand is more than Aggregate supply , then the planned inventory would fall below the desired level as the demand is more than the supply in the market

... Rises in output means rise in a AS and rise in income means rise in AD