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What is inflationary gap and how …

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What is inflationary gap and how it is solved

Posted by Anshul Ar 6 years, 8 months ago

CBSE > Class 12 > Economics

2 answers

Rajat Katkani 6 years, 8 months ago

Inflationary gap is the situation where there is excess of aggregate demand over and above required to maintain full employment equilibrium in the economy or in other words it is the excess of aggregate demand and aggregate supply it can be corrected through increase in bank rate repo rate reverse repo rate CRR SLR selling of securities in open market start rationing of credit increase in tax decrease in government expenditure

Prateek Seth 6 years, 8 months ago

Inflationary gap is a situation when there is an excess demand in the economy owing to fuller utilisation of resources... it is solved by increase in CRR, SLR, bank rate, repo rate, reverse repo rate, selling of open market operationsetc

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