The passage directly states: "aggregate output is determined solely by the level of aggregate demand. This is known as effective demand principle." When aggregate supply is perfectly elastic, only the level of aggregate demand determines output in the economy.
The 'Effective Demand Principle' states that aggregate output is determined solely by :
CUET UG 2023 — Economics Macro
The 'Effective Demand Principle' states that aggregate output is determined solely by :
Verified 13 Jul 2026.
Options
- A
The level of resources in the economy
- B
The level of technology in the economy
- C
The level of aggregate demand in the economy
- D
The level of aggregate supply in the economy
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