Which of the following is not a reason for excess demand ? Option 1: Reduction in Taxes Option 2: Fall in propensity to consume Option 3: Increase in investments Option 4: Increase in government spending

The answer is 'Fall in propensity to consume'. View full solution:

CUET Economics - Which of the following is not a reason for excess demand ? | PYQs + Solutions

CUET Economics

Macro

Medium

Reduction in Taxes

Fall in propensity to consume

Increase in investments

Increase in government spending

✅ Correct Option: 2

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CUET Economics 2022 Slot 2

Match List I with List II

LIST I (Concept under Theory of Income determination)	LIST II (Meaning)
A. Saving < Investment	I. When AD<AS
B. $\frac{1}{1-mpc}$	II. Under employment equilibrium
C. National income will fall	III. Planned inventory would fall below the desired level
D. AD=AS at a point less than full employment	IV. Multiplier

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