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Meghna Thapar 4 years, 9 months ago
Fiscal policy measures to correct excess demand are: increase in taxes, reduction in government expenditure, etc. Monetary policy measures to correct excess demand situation increases in CRR, an increase in bank rate, etc. In a situation of excess demand, the central bank raises the limit of margin requirements. This discourages borrowing because it makes traders get less credit against their securities. ... Other measures of monetary policy are credit rationing, control of consumer credit, wage freeze and direct action.
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