☰
✕

Determination of Income and Employment
Question
Wired Faculty App

Would you advocate expansion or contraction of credit supply in a situation of excess demand?
or
What happens to an economy when credit availability is restricted and credit made costlier? 

Answer

Excess demand and credit supply
In a situation of excess demand, credit supply should be curtailed/contracted to control inflation. When credit availability is restricted and credit is made costlier, the state of excess demand in the economy is controlled to a great extent.

Sponsor Area

Some More Questions From Determination of Income and Employment Chapter

State relationship between income and consumption.

What is Breakeven point?

What are the types of Propensity to consume?

How does MPC affect level of income?

Distinguish between APC and MPC, The value of which of APC and MPC can be greater than one and when?

State relationship between income and saving.