Question : What happens when there is a demand deficiency in an economy?
Option 1: Poverty
Option 2: Stagnation
Option 3: Recession
Option 4: Inflation
Correct Answer: Stagnation
Solution : The correct option is Stagnation.
When there is a deficit in aggregate demand, an economy may stagnate . To support full employment and production capacity, individuals, corporations, and the government must spend more money. Firms do not need to produce as much due to the decline in demand for products and services. There is often higher unemployment in an economy that is stagnant and is affected by lack of demand. Labour and capital are two underutilised production factors.
Related Questions
Know More about
Staff Selection Commission Sub Inspector ...
Application | Eligibility | Selection Process | Result | Cutoff | Admit Card | Preparation Tips
Get Updates Brochure
Your Staff Selection Commission Sub Inspector Exam brochure has been successfully mailed to your registered email id “”.
