Question

India‟s GDP contracted 23.9% in the April-June quarter of 2020-21 as

compared to same period of 2019-20, suggesting that the lockdown has hit

the economy hard‟. The Hindustan Times, 1st September 2020

State and discuss any two fiscal measures that may be taken by the

Government of India to correct the situation indicated in the above news

report.​

Answer 1

Explanation:

India's GDP contracted 23.9% in the April-June quarter of 2020-21 as compared to same period of 2019-20, suggesting that the lockdown. 'India's GDP contracted 23.9% in the April-June quarter of 2020-21 as compared to same period of 2019-20, suggesting that the lockdown has hit the economy hard'.

Answer 2

CBSE-SC30-Q15, Page 1

'India's GDP shrank by 23.9 percent in the April-June quarter of 2020-21 compared to the same period in 2019-20, indicating that the blockade has had a significant impact on the economy.' State and debate any two budgetary actions that the Government of India may adopt to rectify the problem described in the above news story in The Hindustan Times, 1 September 2020.

Explanation

• The two fiscal measures which help in correcting the situation of aggregate demand is less than the aggregate supply are as follows:
• The decrease in taxes: Government should decrease the taxes so that the purchasing power of the individual will increases. As a result, the aggregate demand is equal to the aggregate supply in an economy.
• Increase in government expenditure: Government should increase its expenditure so that the purchasing power of the individual will increase. As a result, the aggregate demand is equal to the aggregate supply in an economy.

The term "equilibrium" refers to a condition in which the economy's aggregate demand equals the company's collective supply.

In addition, when the demand curve cuts the demand supply, that point on the curve is referred to be the product's equilibrium price.

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