The amount by which actual aggregate expenditure falls short of aggregate output corresponding to full employment level in the economy is known as ______.

Question

KollegeApply · Accepted Answer

The amount by which actual aggregate expenditure falls short of aggregate output corresponding to full employment level in the economy is known as deficient demand and deflationary gap. Explanation: When aggregate expenditure is less than the full employment output, it results in deficient demand or a deflationary gap. This leads to unemployment and underutilization of resources in the economy.

AChoose Your Answer