Concept of short – run

In macroeconomics, short – run may be defined as a period of time when ‘technology’ as a factor remains constant.

                                                                                      OR

Short – run in an economy can be defined as the period of time during which, level of output is determined only by the level of employment. Higher the level of employment, higher would be the level of output and vice – versa.

Read More

Deficient Demand

It refers to the situation when aggregate Demand (AD) is short of aggregate supply (AS) corresponding to full employment in the economy.

AD < AS

In other words, Ad in the economy is less than what is required to maintain full employment. Deficient demand leads to full in general price level and results in deflation.

Read More