Arrange the sequence of events relating to establishment of equilibrium in the economy.
(A) This will cause unintended decumulation of inventories
(B) This process continues till ex-ante aggregate demand becomes equal to ex-ante aggregate supply
(C) The producers will respond by increasing output
(D) If ex-ante demand for final goods by firms and households is greater than the output the producers plan to produce in a given year
(E) When output increases, both employment and income rise
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is option 2: (D), (A), (C), (E), (B)
The correct sequence of events relating to the establishment of equilibrium in the economy is:
(D) If ex-ante demand for final goods by firms and households is greater than the output the producers plan to produce in a given year.
(A) This will cause unintended decumulation of inventories.
(C) The producers will respond by increasing output.
(E) When output increases, both employment and income rise.
(B) This process continues till ex-ante aggregate demand becomes equal to ex-ante aggregate supply.