Arrange the following statements in correct sequence with respect to government budget's objective.
A. When demand exceeds for available output under the condition of full employment.
B. May give rise to inflation in the economy.
C. The intervention of the government to stabilize the economy.
D. The overall level of employment and prices depend upon the level of aggregate demand.
Choose the correct answer from the options given below:
Arrange the following statements in correct sequence with respect to government budget's objective.
A. When demand exceeds for available output under the condition of full employment.
B. May give rise to inflation in the economy.
C. The intervention of the government to stabilize the economy.
D. The overall level of employment and prices depend upon the level of aggregate demand.
Choose the correct answer from the options given below:
Solution
The logic runs: the overall level of employment and prices depends on aggregate demand (D); when demand exceeds available output at full employment (A), it may give rise to inflation (B); this calls for government intervention to stabilize the economy (C). Sequence: D, A, B, C.
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