Question

Identify the correctly matched pair from Column A to that of Column B:

Column A	Column B
1. Inflationary Gap	(a) Selling of government securities
2. Deflationary Gap	(2) Increase in Statutory Liquidity Ratio
3. Effects of Deficient Demand	(c) Rise in production level
4. Plans to Expand Exports	(d) AD > AS (at full Exports employment level)

Options

• 1 - (a)

• 2 - (b)

• 3 - (c)

• 4 - (d)

Answer 1

1 - (a)

Explanation:

The inflationary gap is the difference between actual real GDP and GDP that would exist if an economy were running at full capacity.