Question

डिक्रीज इन मनी सप्लाई हेल्पिंग कंट्रोल इन द सिचुएशन ऑफ एक्सेस डिमांड इन इन इकोनामी कमेंट​

Answer 1

Answer:

Excess demand is the excess of aggregate demand over and above its level required to maintain full employment equilibrium in the economy. Excess demand in an economy causes inflation, that is, rise in general level of prices. Thus, central bank takes measures to reduce the credit creation capacity of the commercial banks during inflation. In turn, the money supply in an economy gets reduced and the inflationary gap or excess demand gets combated.