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Government Budget and Economy — Economics STD 12 Humanities & Commerce — Question

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsGovernment Budget and Economy3 Marks
Question
Explain how can government spending be helpful in removing deficient demand.
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Answer

Deficient demand means excess of AS over AD at full employment. Since government expenditure is component of AD, increasing it will help in removing deficient demand in the economy.

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