Practicing Success
Deficient demand leads to _____________ and can be corrected through _________ Which of the following options suits best in the above blank? |
Inflationary gap, fiscal policy Deflationary gap, fiscal policy No gap, monetary policy Deflationary gap, fiscal and monetary policy |
Deflationary gap, fiscal and monetary policy |
Deficient demand means supply is more as compare to demand. This leads to producers lowering the prices of their goods in order to sell them. This leads to deflationary gap. Deficient demand can be corrected through both – monetary and fiscal policies. |