What is inflationary gap ? Explain …
CBSE, JEE, NEET, CUET
Question Bank, Mock Tests, Exam Papers
NCERT Solutions, Sample Papers, Notes, Videos
Posted by Ankit Kumar 5 years, 2 months ago
- 1 answers
Test
Related Questions
Posted by Rijum Karlo 1 year, 4 months ago
- 0 answers
Posted by Niyati Garg 1 year, 4 months ago
- 0 answers
Posted by Shruti Singh 1 year, 5 months ago
- 0 answers
Posted by Dipika Sharma 1 year, 4 months ago
- 0 answers
Posted by Mehar Ansari 1 year, 4 months ago
- 0 answers
Posted by Nandita Sharma 1 year, 5 months ago
- 1 answers
Posted by Naman Jain 1 year, 4 months ago
- 1 answers
myCBSEguide
Trusted by 1 Crore+ Students
Test Generator
Create papers online. It's FREE.
CUET Mock Tests
75,000+ questions to practice only on myCBSEguide app
Yogita Ingle 5 years, 2 months ago
Excess demand or inflationary gap is the excess of aggregate demand over and above its level required to maintain full employment equilibrium in the economy.
Cash reserve ratio refers to the percentage of total demand deposits of the commercial banks which they must keep as cash reserves with the RBI.
In order to control excess demand, the central bank must increase CRR so the credit creation capacity of the commercial banks and the money supply in an economy get decreased. As a result aggregate demand will also fall.
0Thank You