What will happen in the economy if aggregate demand (AD) is less than aggregate supply (AS)? Option 1: Producers will reduce production. Option 2: Producers will expand production. Option 3: The level of income will be constant. Option 4: The level of income will be increase.

The answer is 'Producers will reduce production.'. View full solution:

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

The <=vel of income will be constant.

The <=vel of income will be increase.

CUET Economics 2026 20th May Shift 1

Macro

Easy

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