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What happen if AD>AS prior to …

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What happen if AD>AS prior to full employment level of output.

    • Posted by Diwakar Kumar Gautam Abc 3 years, 4 months ago

    CBSE > Class 12 > Economics
    • 1 answers

    Preeti Dabral 3 years, 4 months ago

    • There will be underemployment equlibrium.
    • According to Keynes, equilibrium is mere intersection of AD and AS, full employment may or may not be there.
    • Under employment equilibrium refers to a situation when AD is equal to AS but resources are not fully utilised.
    • It occurs prior to the full employment level.

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