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Explain the concept of Deflationary Gap. - Economics

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प्रश्न

Explain the concept of deflationary gap.

Define deflationary gap.

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उत्तर

Deficient demand means a situation when the aggregate demand is short of the aggregate supply corresponding to full employment in the economy. It leads to a fall in the general price level and results in deflation, i.e. AD < AS. This is the situation of the deflationary gap.

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2014-2015 (March) Delhi Set 2
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