What are the reasons or causes for excess demand?

1.	What are the reasons or causes for excess demand?
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

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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What are the reasons or causes for excess demand?

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