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प्रश्न
“In an economy ex-ante Aggregate Demand is less than ex-ante Aggregate Supply.”
Explain its impact on the level of output, income and employment.
उत्तर
- If ex-ante aggregate demand is smaller than ex-ante aggregate supply (AD<AS), it signifies that households spend less on goods and services than the economy's flow of goods and services.
- Effect on output: Goods will remain unsold with the producers, and in order to clear the stocks, the producers will seek to reduce production. As a result, the economy's output will fall.
- Effect on Employment: The plan to lower output will result in a decrease in the country's employment level. Producers will begin to lay off workers.
- Effect on Income: Employee retrenchment or layoffs will result in a drop in the country's income level. The country's national income and per capita income will fall.
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संबंधित प्रश्न
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| Group A | Group B | ||
| 1) | Aggregate Supply | a) | Expected receipts |
| 2) | Autonomous Investment | b) | Lord J. M. Keynes |
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| 4) | A.P.C. | d) | ΔC/ΔY |
| 5) | Investment | e) | C/Y |
| f) | Addition to stock of capital | ||
| g) | Destruction of utility | ||
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| Column A | Column B |
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| (3) Paradox of Thrift | (c) People save less or same as before |
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