Practicing Success
Excess demand is a situation in which: |
AD > AS at full employment level AD < AS at full employment level AD > AS at under employment level AD < AS at under employment level |
AD > AS at full employment level |
Excess demand refers to the situation when aggregate demand is in excess of aggregate supply corresponding to full employment in the economy, i.e. AD > AS, corresponding to full employment OR When the actual level of aggregate demand is more than the required/planned level of aggregate demand to maintain full employment. |