ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True or False:To correct the inflationary gap, availability of credit should be increased.
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True
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False
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -To correct the deflationary gap, availability of credit should be increased. Answer: True.
Detailed explanation-2: -Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions.
Detailed explanation-3: -Detailed Solution. The correct answer is It leads to demand-pull Inflation.
Detailed explanation-4: -Increase in taxes: Government levies new taxes and enhances the rate of prevailing ones. Surplus budget policy: Government’s expenditure should remain less than its income. More items
There is 1 question to complete.