PART A
INTRODUCTORY MACROECONOMICS
CHAPTER 9
PROBLEM OF DEFICIENT DEMAND AND EXCESS DEMAND
I.
II.
III.
IV.
V.
VI.
1.
2.
1.
2.
1.
2.
3.
4.
1.
2.
3.
4.
1.
2.
3.
4.
VII.
FULL EMPLOYMENT EQUILIBRIUM AND UNDEREMPLOYMENT
EQUILIBRIUM
Full Employment Equilibrium
Underemployment Equilibrium
VOLUNTARY AND INVOLUNTARY UNEMPLOYMENT
Voluntary Unemployment
Involuntary Unemployment
FULL EMPLOYMENT AND NATURAL UNEMPLOYMENT
Full Employment
Natural Employment
Frictional Unemployment
Structural Unemployment
PROBLEM OF DEFICIENT DEMAND
Meaning of Deficient Demand
Measurement of Deficient Demand
Causes of Deficient Demand
Consequences of Deficient Demand
PROBLEM OF EXCESS DEMAND
Concept of Excess Demand
Measurement of Excess Demand
Causes of Excess Demand
Consequences of Excess Demand
DIFFERENCE BETWEEN INFLATIONARY GAP AND
DEFLATIONARY GAP
MEASURES TO CORRECT DEFICIENT DEMAND AND EXCESS
DEMAND
1. Fiscal Measures
2. Monetary Measures