CBSE Class 12-commerce Macroeconomics Equilibrium: AD-AS & S-I Approach and Adjustment Mechanism

Learn about Equilibrium: AD, AS & SI Approach and Adjustment Mechanism from the CBSE Class 12 Commerce Economics chapter Income Determination by referring to the revision notes, sample papers, past years’ papers etc. at TopperLearning.

The equilibrium level of income in an economy is determined at the intersection point of the AD and AS curves.

Aggregate demand means the total demand for final goods in an economy. The AD curve has a positive slope which means when income increases, AD (expenditure) also increases. It is represented by C + I.

Aggregate supply is the value of the total quantity of final goods and services produced in the economic territory of a country. An aggregate supply curve is the sum total of consumption and saving. It is a positively sloped 45° straight line curve starting from the origin.