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Question : Which of the following is the reason of excess demand?

Option 1: Fall in imports

Option 2: Rise in exports

Option 3: Deficit financing

Option 4: All of the above.


Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Fall in imports


Solution : Following are the reasons of excess demand-

  1. Rise in the prosperity to consume
  2. Reduction in taxes
  3. Increase in government expenditure
  4. Increase in investment
  5. Fall in imports
  6. Rise in exports
  7. Deficit financing

Hence Option D is correct.

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