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1. |
Discuss any two fiscal measures to correct a situation of deficient demand in an economy. |
Answer» Increases in government expenditure : If the government expenditure is increased by an amount equal to the deflationary gap, it will restore the economy to the full employment equilibrium. Reduction in the amount of taxes: The government can give tax concession to leave more disposable income in the hands of people. As a result, aggregate demand will increase. |
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