What is
the impact of excess
demand?
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Answered by
3
Answer: It causes rise in prices and increases in equalities: Generally, excess demand results in inflation (continuous rise in prices) without increase in output and employment. But in different situations in the economy, the impact will also be different. We discuss the impact of excess demand in reference to these .
Answered by
1
Answer:
Excess demand on output, employment and prices causes inflation in an economy. Inflation refers to the rise in general level of prices in an economy. Inflationary gap refers to the excess of aggregate demand over and above its level required to maintain full employment equilibrium in the economy.
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