Option 1 -> In underemployment equilibrium, AD = AS but below full employment level - TRUE.
Option 2 -> Excess production capacity exists due to underutilization - TRUE.
Option 3 -> Resources remain idle and underutilized - TRUE.
Option 4 -> This contradicts the concept of underemployment equilibrium - NOT TRUE.
Hence, Option 4: Resources are fully and efficiently utilised -> In underemployment equilibrium, the economy operates below its full capacity with unemployed labor and idle resources. Full and efficient resource utilization only occurs at full employment equilibrium. The defining characteristic of underemployment equilibrium is that aggregate demand equals aggregate supply at a level where resources are NOT fully utilized, leading to involuntary unemployment and unused productive capacity. -> correct