Multiple Choice Questions on A situation when AS AD along with fuller utilisation of resources in the economy is called ........... for Common University Entrance Test (CUET) Preparation

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Multiple Choice Questions

A situation when AS AD along with fuller utilisation of resources in the economy is called ...........

Economics (CUET) Determination of Income and Employment
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    A situation when AS = AD along with fuller utilisation of resources in the economy is called:

     

    underemployment equilibrium.
     

    Incorrect Answer

    inflationary gap.
     

    Incorrect Answer

    equilibrium without excess capacity.
     

    Correct Answer

    deflationary gap.

    Incorrect Answer
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    Explanation:

    Option (3) is correct.
    Explanation: When AD=AS, all the producers wish to produce during the year is exactly equal to what the buyers wish to spend on the purchase of goods and services during the
    year, so, there is no excess capacity.

    By: Parvesh Mehta
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