Sandeep Garg Macroeconomics Class 12- Chapter 9: Excess Demand and Deficient Demand

Sandeep Garg Class 12 Macroeconomics Solutions Chapter 9: Excess Demand and Deficient Demand are explained by the expert Economic teachers from the latest edition of Sandeep Garg Macroeconomics Class 12 textbook solutions. We at CoolGyan’S provide Sandeep Garg Economics Class 12 Solutions to give comprehensive insight about the subject to the students. These insights help as a priceless benefit to students while completing their homework or while studying for their exams. There are numerous concepts in Economics, but here we provide you the solutions from Excess Demand and Deficient Demand, which will be useful for the students to score well in the board exams.

Sandeep Garg Solutions Class 12 – Chapter 9 – Part B

Question 1

Name the situation under which planned aggregate expenditure exceeds the equilibrium level of expenditure.

Ans: Excess demand

Question 2

What does the inflationary gap measure?

Ans: The inflationary gap measures the quantum of excess demand.

Question 3

Name the situation under which aggregate demand is insufficient to eliminate involuntary unemployment.

Ans: Deficient demand

Question 4

What is the impact of a decrease in margin requirements?

Ans: Decrease in margin requirements encourages borrowings and raises the aggregate demand.

Explore link: Income Determination and Multiplier Solutions

Question 5

State two measures by which a central bank can attempt to reduce the inflationary gap.

Ans: The two measures by which a central bank can attempt to reduce the inflationary gap are.

• Increase in bank rate
• Sale in government securities

Question 6

What is the impact of excess demand and deficient demand on the price level?

Ans: Excess demand raises the general price level (inflation), whereas, deficient demand reduces it (deflation).

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Also Read the concept of Demand