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Economics

Measures to correct excess/deficient demand - Government spending

In Class 12 Economics, this topic from “Determination of Income and Employment” explains how government spending can correct excess demand and deficient demand. Students learn why reducing public expenditure can control inflationary pressure when aggregate demand is too high, while increasing expenditure can raise demand, output, income and employment during a demand shortage. The topic also connects government expenditure with fiscal policy, the multiplier effect and macroeconomic stability.

Easy · Level 1 · 1 questions

TOPIC PRACTICE

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  1. Because it is only private food
  2. Because it is only family expense
  3. Because it can affect aggregate demand and growth
  4. Because it is the expense of only one shop

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