Advertisements
Advertisements
Question
When does a situation of excess demand arise in an economy?
Short Answer
Advertisements
Solution
A situation of excess demand arises when aggregate demand is more than aggregate supply at the level of full employment. This means people want to buy more goods and services than the economy can produce, leading to inflation (rise in prices).
shaalaa.com
Is there an error in this question or solution?
Chapter 12: Theory of Income and Employment - TEST YOURSELF QUESTIONS [Page 230]
