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A deflationary gap occurs when ag­gregate demand is less than aggregate supply. Deflationary gap depicts a situation in which total spending in an economy is insufficient to buy all the output that can be produced without unemployment occurring.

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A deflationary gap occurs when ag­gregate demand is less than aggregate supply. Deflationary gap depicts a situation in which total spending in an economy is insufficient to buy all the output that can be produced without unemployment occurring.

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