Sandeep Garg Solutions for Class 12 Macroeconomics Chapter 9

Benefits of studying Chapter 9 from Sandeep Garg Macroeconomics Class 12 Solutions

• It includes clear and to-the-point answers.

• The solutions are prepared by professionals in the field. Hence, students can rest assured that the answers given are correct and accurate.

• It is a great supplement to the Sandeep Garg textbook as it includes answers to the questions in the text. 

• It is very helpful while preparing for exams as well as completing homework.

• It can also be used for practice and revision as well. 

• It is completely free and easily available to students in pdf format. 

Key Topics in Sandeep Garg Class 12 Macroeconomics Solutions Chapter 9

1. Excess Demand

Excess demand occurs when aggregate demand in an economy exceeds the aggregate supply. In such a situation, the supply meets the utmost level with complete utilization of resources as well as employment. In the first answer of Sandeep Garg Class 12 Macroeconomics solutions Chapter 9, excess demand is explained.

2. Inflation

Inflation is the hike in the price of goods and services in an economy. It generally occurs when there is more demand than the actual supply of products and services. Often, an excess flow of money in the market also leads to inflation. With the growth in money, the spending power of people is also more. This, in turn, raises the level of demand in an economy. This increased level of demand results in inflation.

3. Inflationary Gap

An inflationary gap happens when the gross demand in a market exceeds the gross supply. In this situation, there is not enough supply of goods and services to suffice the demand of the consumers. An inflationary gap implies excess demand in an economy. Answer 2 in Macroeconomics Class 12 Chapter 9 Sandeep Garg gives a detailed description of this topic.

4. Deficient Demand or Deflationary Gap

The deflationary gap is the amount by which aggregate supply in an economy exceeds the aggregate demand. A deflationary gap also results in lower-income, employment, output, price levels, etc.

5. Margin Requirement

The margin requirement is the gap between the mortgage sum of a loan and the actual value of the credit. A decrease in margin requirement would facilitate easy borrowing of loans in an economy as people would find it convenient to borrow loans. This, in turn, will result in high aggregate demand. Solution 4 in the Class 12 macroeconomics solutions for Chapter 5 elaborates on this topic.

6. Measures to Control Inflationary Gap

It is the central bank that is responsible for reducing the inflationary gap when such instances occur. The two measures to restrict the inflationary gap are:

• Increase in bank interest rates- A rise in bank rates made by the central bank would also force commercial banks to increase their lending interest rates. This would bring down the demand for credit among borrowers.

• Open market operations- This includes selling off securities, changing the stock of liquid assets, etc.

• In class 12 Sandeep Garg solutions chapter 9, Excess Demand and Deficient Demand, all the topics mentioned above have been covered exhaustively.

Crucial Tips to follow for your Economics Exam

Students nearing their board exams can adapt the following tips in their studies:

• Get all your doubts and confusions cleared as and when they arise. Proceeding with the other chapters without understanding a particular chapter could lead to trouble. 

• During the last few days prior to the exam, try solving as many sample papers and exercise questions as you can.

• Download the Class 12 macroeconomics Sandeep Garg solution Chapter 9 PDF and all other such materials as it will allow you to practice whenever you want.

• This chapter contains a lot of fundamental concepts, which form the core of most macroeconomics lessons. A detailed insight on Excess Demand and Deficient Demand will also help you understand the mechanism behind price determination in a market.