--%>
Assignment Help - homework help

Impact of deficient demand in an economy

Describe deficient demand in an economy? Determine its impact on output, employment and price?

Answer: Deficient demand terms to the condition when aggregate demand (AD) is short of aggregate supply (AS) equivalent to full employment in an economy.

Effect on output: The low level of investment and employment entails low level of output.

Effect on employment: Since of deficiency of demand investment level is decreased. Accordingly level of employment tends to down/fall.

Effect on price: Falling in prices is the immediate result of deficient demand.

   Related Questions in Microeconomics

  • Q : Demand in Dynamics The raise in the

    The raise in the supply of potatoes is probable to decrease the: (i) Supply of potato harvesters. (ii) Demand for pasta and rice. (iii) Price of Big Macs. (iv) Quantity of ketchup people put on hot-dogs. (e) Budgets of most house-holds.

  • Q : Value of the Average Product Hulk is

    Hulk is the fitness counselor who coaches 5 clients at a time in the exercise groups at Beefcake Body Builders. His hourly salary is $17, and Beefcake charges Hulk’s clients $20 for each and every hour-long conditioning session. Average value of the product Hulk

    		•
  • Q : Problem on Laws and Regulations Can

    Can someone please help me in finding out the accurate answer from the following question. Raised demand for beer would be most probable to follow a fall in the: (1) Legal drinking age. (2) Price of ale. (3) Price of hard liquor. (4) Price of wine.

    		•
  • Q : Increasing demand for Complementary

    Can someone please help me in finding out the accurate answer from the following question. When tortilla chips go on sale for fifty percent off, then the demand for salsa is most probable to: (1) Stay similar. (2) Reduce. (3) Raise. (d) Raise only when salsa as well g

    		•
  • Q : Problem regarding to price ceilings and

    Persistent shortages of a good are mostly all the time attributable to: (w) legal ceiling prices that are set below equilibrium. (x) recessions that yield high unemployment rates. (y) price gouging by firms with monopoly power. (z) legal price floors

    		•
  • Q : Comparative statics and consumer demand

    Explain the methodological procedure called comparative statics.  What does this procedure imply regarding the nature of the consumer demand curve?

    		•
  • Q : Problem on mutual funds Provide

    Provide solution of this question. Supposing no other changes, if balances in small time deposits increase by $30 billion and money market mutual funds held by businesses decrease by $30 billion, the: A) M1 and M2 money supplies will not change. B) M2 and MZM money su

    		•
  • Q : Consumer behaviour Please, describe me

    Please, describe me what lexicographic is and its application also.

    		•
  • Q : Competition-Social Welfare Only the

    Only the purely competitive firm which is as well a price taker in the labor market maximizes the profit by employing labor where: (1) Quantity of the labor employed is maximized. (2) Average wage rate equivalents labor's marginal revenue product. (3) Average wage rat

    		•
  • Q : Occurrence of price discrimination

    Price discrimination arises whenever: (1) prices are exactly proportional to average variable costs. (2) customers who refuse to pay the market price must go without. (3) a good is sold at different prices not reflecting differences in costs. (4) perf

    		•