Question

Which of the following statements is correct with respect to the correction of Excess Demand?

पर्याय

• Government reduces the truces

• Government reduces its expenditure

• The Central Bank reduces bank rates

• The Central Bank sells securities from the Open Market

Answer 1

Government reduces its expenditure

Explanation:

Reduced government expenditure will lower aggregate demand in the economy, which will aid in the correction of inflationary pressures.