Explain the meaning of under-employment equilibrium. Explain two measures by which full-employment equilibrium can be reached.
CBSE OUTSIDE DELHI - SET 1 2013
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When aggregate demand and aggregate supply are equal at less than full employment level then it is a situation of underemployment equilibrium. Measures to reach full employment equilibrium:
- Increase in government expenditure
- Reducing Bank Rate
- Buying of govt. securities from the market by the Central Bank etc.
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