Question : It refers to a situation with the aggregate demand is equal to aggregate supply when the resources are not fully employed. It generally occurs prior to full employment level.
Option 1: Full employment equilibrium
Option 2: Underemployment equilibrium
Option 3: Over full employment equilibrium
Option 4: None of the above.
Correct Answer: Underemployment equilibrium
Solution : Underemployment equilibrium refers to a situation with the aggregate demand is equal to aggregate supply when the resources are not fully employed. It generally occurs prior to full employment level. Hence, Option B is correct.
Question : It refers to a situation when demand is equal to aggregate supply beyond the full employment level. It occurs after the full employment level.
Question : It refers to a situation where the aggregate demand is equal to aggregate supply at full employment level.
Question : _________________ refers to the situation in aggregate demand is more than the aggregate supply.
Question : Effective demand refers to that level of aggregate demand which becomes effective because it is equal to aggregate supply.
Question : In case of an underemployment equilibrium, which of the following alternative is not true?
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