Explain how the level of effective …
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Indrajeet Singh Arora 6 years, 7 months ago
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Yogita Ingle 6 years, 7 months ago
When AD > AS
supply of goods and services in the economy tends to be less than their demand. The existing stocks of the producers will be sold out and will suffer the loss of unfulfilled demand. To rebuild the desired stocks and avoid the loss of unfulfilled demand the producers will plan greater production. AS would increase to become equal to AD. Thus, equilibrium is restored through change in output or change in Y.
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