+3 votes
in Class 12 by kratos

What are the reasons or causes for deficient demand?

1 Answer

+1 vote
by kratos
 
Best answer

The main reasons for deficient demand are apparently the decrease in four components of aggregate demand:

  1. Decrease in household consumption demand due to fall in propensity to consume.

  2. Decrease in private investment demand because of fall in credit facilities.

  3. Decrease in public (government) expenditure.

  4. Decrease in export demand.

  5. Decrease in money supply or decrease in disposable income.

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