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Determination of Income and Employment — Economics STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEconomicsDetermination of Income and Employment3 Marks
Question
Discuss any three measures by which deficient demand in an economy can be corrected?
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Answer

The problem of deficient demand can be solved by increasing Aggregate Demand as under:
  1. Increase in public expenditure on public welfare.
  2. Reduction in direct and indirect taxes, which will lead to increase in disposable income and increase in demand.
  3. Reduction in bank rate, which will result in reducing the rate of interest. As a result, investment will increase and AD will also increase.

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