An "Inflationary Gap" can be eliminated by increasing Government purchases and reducing taxes.
مہنگائی کا خلا حکومت کے اخراجات بڑھانے اور ٹیکس کم کرنے سے ختم کیا جا سکتا ہے۔
- True
- False
Explanation
- An inflationary gap occurs when aggregate demand is greater than full-employment output.
- This leads to rising prices (inflation) in the economy.
- To control it, government should reduce total demand in the economy.
- This is done by decreasing government spending or increasing taxes.
- So, the given statement is incorrect.
Last verified on 23-04-2026
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