Question:
(a) “In an economy, ex-ante Aggregate Supply is more than ex-ante Aggregate Demand.”
Explain its impact on the level of output, income, and employment.
(a) “In an economy, ex-ante Aggregate Supply is more than ex-ante Aggregate Demand.”
Explain its impact on the level of output, income, and employment.
Explain its impact on the level of output, income, and employment.
Show Hint
Excess \(AS\) over \(AD\) leads to reduced production, income, and employment, causing economic contraction.
Updated On: Jan 13, 2026
Hide Solution
Verified By Collegedunia
Solution and Explanation
Reduction in Output: Excess supply causes inventory buildup, forcing firms to reduce production.
Decline in Income: Lower production reduces income for workers and firms.
Unemployment: Firms may cut jobs due to reduced production needs, leading to higher unemployment.
Was this answer helpful?
0
0
Top Questions on Debts
- The rate of interest payable on debenture is _____.
- Debts which have to be paid at some specific future date are known as:
- \[ \begin{array}{|l|l|} \hline \textbf{Column I} & \textbf{Column II} \\ \hline \text{Cement shop owner} & \text{Self-employed} \\ \hline \text{Construction worker} & \text{Casual wage worker} \\ \hline \text{Civil engineer} & \text{Regular salaried} \\ \hline \end{array} \]
For a hypothetical economy, assume the government increased infrastructural investment by ₹10,000 crore. 80% of additional income is consumed in the economy. Estimate the increase in income and the corresponding increase in consumption expenditure in the economy.
- \[ \begin{array}{|c|l|r|} \hline \textbf{S.No.} & \textbf{Items} & \textbf{Amount (₹ crore)} \\ \hline (i) & \text{Wages and Salaries} & 2,000 \\ \hline (ii) & \text{Rent and Interest} & 700 \\ \hline (iii) & \text{Corporate Tax} & 500 \\ \hline (iv) & \text{Undistributed Profit} & 300 \\ \hline (v) & \text{Consumption of Fixed Capital} & 200 \\ \hline (vi) & \text{Dividend} & 150 \\ \hline (vii) & \text{Net Factor Income from Abroad} & -50 \\ \hline \end{array} \]
View More Questions
Questions Asked in CBSE CLASS XII exam
- A rectangular glass slab ABCD (refractive index 1.5) is surrounded by a transparent liquid (refractive index 1.25) as shown in the figure. A ray of light is incident on face AB at an angle \(i\) such that it is refracted out grazing the face AD. Find the value of angle \(i\).
- CBSE CLASS XII - 2025
- Refraction
- Considering the case of magnetic field produced by air-filled current carrying solenoid, show that the magnetic energy density of a magnetic field \( B \) is \( \frac{B^2}{2\mu_0} \).
- CBSE CLASS XII - 2025
- Magnetic Field
- The slope of the curve \( y = -x^3 + 3x^2 + 8x - 20 \) is maximum at:
- CBSE CLASS XII - 2025
- Maxima and Minima
- Three batteries E1, E2, and E3 of emfs and internal resistances (4 V, 2 \(\Omega\)), (2 V, 4 \(\Omega\)) and (6 V, 2 \(\Omega\)) respectively are connected as shown in the figure. Find the values of the currents passing through batteries E1, E2, and E3.
- CBSE CLASS XII - 2025
- Kirchhoff's Laws
- Two wires made of the same material have the same length \( l \) but different cross-sectional areas \( A_1 \) and \( A_2 \). They are connected together with a cell of voltage \( V \). Find the ratio of the drift velocities of free electrons in the two wires when they are joined in: (i) series, and (ii) parallel.
- CBSE CLASS XII - 2025
- Current electricity
View More Questions