Macro

Income & Employment

Easy

What will happen in the economy if aggregate demand (AD) is less than aggregate supply (AS)?

Producers will reduce production.

Producers will expand production.

The level of income will be constant.

The level of income will be increase.

✅ Correct Option: 1

If AD is less than AS, planned spending falls short of output, so unsold stocks pile up. Producers respond by cutting production, and output and income fall until equilibrium is restored.

2026: 13 May Shift 1

The ratio of the total increment in equilibrium value of final goods output to the initial increment in autonomous expenditure is called?

2023: 20 June Shift 1

Aggregate demand for final goods doesn't include.

2025: 15 May Shift 1

If, in an economy, the minimum level of consumption is 45 and 80% of an increase in income(Y) is consumed, what will be the consumption function of this economy?

2023: 20 June Shift 1

Equilibrium in product market achieved when.

2023: 1 June Shift 1

If MPC and MPS are equal, then the value of multiplier is :

2026: 15 May Shift 1

Which of the following describes the marginal propensity to save ?

What will happen in the economy if aggregate demand (AD) is less than aggregate supply (AS)?

Solution

Related questions:

Keyboard Shortcuts

CUET Economics Past Year Questions (Topic-Wise)