CBSE
Class 10
Class 12
Excess Demand: Excess demand refers to a situation when aggregate demand exceeds aggregate supply corresponding to full employment. Excess Demand causes Inflationary Gap i.e. When aggregate demand is more than 'level of output at full employment', then the excess or gap is called inflationary gap.
Diagrammatic Presentation:
Important Measures to Control Situation of Excess Demand: