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Explain the Role of 'Margin Requirements' in Removing This Deficient Demand Gap. - CBSE (Arts) Class 12 - Economics

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Question

Explain the role of 'Margin Requirements' in removing this deficient demand gap.

Solution

Reduction of margin money requirements is a measure which induces borrowers to avail more loans from commercial banks. This, in turn, increases the ability to purchase more. In this way, the aggregate demand increases to the level of aggregate supply and the economy attain equilibrium.

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Solution Explain the Role of 'Margin Requirements' in Removing This Deficient Demand Gap. Concept: Concept of Aggregate Demand and Aggregate Supply.
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