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explain the role of budget in fighting inflation and deflation tendeies

Posted by Abhishek Singh 1 year, 8 months ago

CBSE > Class 11 > Economics

3 answers

Abhishek Thakur 1 year, 7 months ago

MU is the extra utility that we derive from the consumption of an extra unit. Whereas the total utility is the sum of utility from the given units. Let suppose if you consume the first unit of icecream then the utility is 50 utils and from the next unit utility is 80 utils. So, we can say that the utility from the extra unit is 30 utils (80-50) is MU

Abhishek Thakur 1 year, 7 months ago

During inflation when aggregate demand is more than the aggregate supply the government uses surplus budget policy in which it increases tax rates and decreases its expenditure that will decrease the aggregate demand and ultimately inflation. Same vice versa in case of deflation.

Kushal Gupta 1 year, 7 months ago

Explain the tu and mu

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