MEANING OF EFFECTIVE DEMAND AT IT'S QUILIBRIUM LEVEL

MEANING OF EFFECTIVE DEMAND AT IT'S EQUILIBRIUM LEVEL.

EFFECTIVE DEMAND MEANS WHERE AGGREGATE DEMAND AND AGGREGATE SUPPLY IS AT EQUILIBRIUM LEVEL. WHERE AGG. DEMAND MEANS THE TOTAL DEMANDS IN AN ECONOMY & AGG. SUPPLY MEANS WHERE TOTAL SUPPLY IN AN ECONOMY. WHERE AS AGGREGATE DEMAND IS CONTROL BY CUSTOMERS AND AGGREAGTE SUPPLY IS CONTROL BY PRODUCERS IN AN ECONOMY. IF AGGREGATE DEMAND AND SUPPLY IS AT EQUILIBRIUM LEVEL THEN IT IS CONSIDER AS  EFFECTIVE DEMAND.AND IT IS MAXIMUM AT FULL LEVEL OF EMPLOYEMENT BECAUSE WHERE EVERY PERSONS HAVE TO SATISFY THEIR BASIC NEEDS

AS THE ABOVE DIAGRAM SHOWS THAT AD & AS CURVE INTERSECT EACH OTHER AT MAXIMUM LEVEL.

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