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An economy is in equilibrium. Find Marginal Propensity to Consume from the following:
National income = 2000
Autonomous consumption = 400
Investment expenditure = 200
Explain the meaning of deflationary gap with the help of a diagram. OR
Explain with the help of a diagram the concept of deficient demand in macroeconomics.
Explain the meaning of inflationary gap. Explain any two measures of correcting it. OR
Explain and graphically represent the concept of inflationary gap. Explain any one measure of removing this gap.