Question
Economics Question on Demand analysis
Assuming aggregate supply perfectly elastic and AD curve downward sloping then, under the circumstances aggregate output is determined solely by the level of aggregate demand. This is known as :
A
Effective Demand Principle
B
Effective Supply Principle
C
Effective Aggregate Principle
D
Effective Production Principle
Answer
Effective Demand Principle
Explanation
Solution
The correct option is (A) :Effective Demand Principle.