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

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsDetermination of Income and Employment1 Mark
Question
The main cause(s) of deficit demand is/ are:
  1. Decrease in money supply.
  2. Increase in public expenditure.
  3. Decrease in investment demand.
  4. Both (a) and (c).
✓

Answer

  1. Both (a) and (c).

Explanation:

Deficit demand occurs due to fall in government expenditure, fall in level of autonomous investment, fall in supply of money and credit and decrease in marginal propensity to consume.

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