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What is one consequence of government expenditure exceeding real output?
  • a)
    Decrease in aggregate demand
  • b)
    Rise in excess demand
  • c)
    Increase in public consumption
  • d)
    Control of inflation
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is one consequence of government expenditure exceeding real outpu...
When government expenditure exceeds real output, it can lead to excess demand in the economy, contributing to inflationary pressures. This situation necessitates measures to reduce demand and stabilize prices.
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