Question

Write the measures to correct excess demand

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Answer 1

Answer:

Measure to Correct Excess Demand – Explained!

In order to correct Excess Demand, the following measures may be adopted:

Two major instruments of Monetary Policy, used to decrease availability of credit are:

Increase in Bank Rate:

Open Market Operations (Sale of securities):

Increase in Legal Reserve Requirements (LRR):

There are two components of legal reserves