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

Rajasthan BoardEnglish MediumSTD 12 Humanities & CommerceEconomicsDetermination of Income and Employment3 Marks
Question
What are the reasons or causes for excess demand?
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Answer

The main reasons for excess demand are apparently the increase in the following components of aggregate demand:
  1. Increase in household consumption demand due to rise in propensity to consume.
  2. Increase in private investment demand because of rise in credit facilities.
  3. Increase in public (government) expenditure.
  4. Increase in export demand.
  5. Increase in money supply or increase in disposable income.

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