If aggregate demand is inadequate,equilibrium real output is less than the full-employment output level.

Question

Quizplus · Accepted Answer

When aggregate demand is inadequate, it means that the total level of demand in the economy is insufficient to utilize all available resources. As a result, businesses reduce production and employment, leading to a lower level of output than the full-employment output level. Therefore, the statement is true.

If Aggregate Demand Is Inadequate,equilibrium Real Output Is Less Than