Question

When Aggregate demand is less than Aggregate supply to reach full employment level, it is called: ​

Answer 1

Explanation:

When Aggregate demand is more than Aggregate supply , then the planned inventory would fall below the desired level. To bring back the Inventory at the desired level, the producers expand the output More output means more income. Rise in output means rise in AS and rise in income means rise in AD. Both continue to rise till they reach a level where AD = AS.

Answer 2

Explanation:

The situation when aggregate demand is less than aggregate supply corresponding to the full employment level of output in the economy is called deficient demand.