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What happens when the Investment is lesser than Savings?
Aggregate Demand is more than the Aggregate Supply.
Aggregate Demand is less than the Aggregate Supply
Aggregate Demand is equal to the Aggregate Supply.
Aggregate Demand is independent of Aggregate Supply.
Option (2) is correct. Explanation: When the investment is less than savings, the expenditure in the economy is less than what producers had expected, resulting in undesired building-up of unsold stock. Consequently, AD falls short of AS.
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