Question : Which of the following are the reasons of deficient demand?
Option 1: Decrease in prosperity to consume
Option 2: Increase in taxes
Option 3: Both A and B
Option 4: Neither A nor B
Correct Answer: Both A and B
Solution : Following are the reasons of deficient demand-
- Decrease in prosperity to consume
- Increase in taxes
- Decrease in government expenditure
- Fall in investment expenditure
- Rise in imports
- Fall in exports.
Hence, Option C is correct.