Excess Demand and Deficient Demand
Expert economics teachers clarify ‘Sandeep Garg Class 12 Macroeconomics Solutions Chapter 9: Excess Demand and Deficient Demand' from the new edition of Sandeep Garg Macroeconomics Class 12 textbook solutions. Sandeep Garg Economics Class 12 Solutions are available at MNS EdTech to provide students with a thorough understanding of the subject.
These insights are a priceless benefit for students when it comes to completing homework or preparing for exams. There are several principles in economics, but we have solutions for Excess Demand and Deficient Demand that will help students do well on their board exams.
Sandeep Garg Solutions Class 12 – Chapter 9 – Part B
Question 1
Name the situation under which the planned aggregate expenditure exceeds the equilibrium level of expenditure.
Answer:
Excess demand
Question 2
What does the inflationary gap measure?
Answer:
The inflationary gap measures the quantum of excess demand.
Question 3
Name the situation under which the aggregate demand is insufficient to eliminate involuntary unemployment.
Answer:
Deficient demand
Question 4
What is the impact of a decrease in the margin requirements?
Answer:
A decrease in the margin requirements encourages borrowings and raises the aggregate demand.
Question 5
State two measures by which a central bank can attempt to reduce the inflationary gap.
Answer:
The two measures by which a central bank can attempt to reduce the inflationary gap are as follows:
- Increase in the bank rate
- Sale in the government securities
Question 6
What is the impact of the excess and deficient demands on the price level?
Answer:
The excess demand raises the general price level (inflation), whereas the deficient demand reduces it (deflation).
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