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In an economy, when is… (Class 12 Economics 2026, Q4)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/1/1 · 1 mark · MCQ

CBSE Class 12 Economics 2026: question 4

Set in the CBSE Class 12 board exam of 2026, paper 58/1/1, section A, question 4, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q4 · 1 mark · MCQDetermination of Income and Employment

In an economy, when __________ is insufficient to achieve the level of output corresponding to the full employment, the difference is termed a deflationary gap. (Choose the correct option to fill in the blank)

  1. (A)ex-ante Aggregate Demand
  2. (B)ex-post Aggregate Demand
  3. (C)ex-ante Aggregate Supply
  4. (D)ex-post Aggregate Supply

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/1/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Is the gap about planned or realised spending?

Hint 2

Deflationary means demand is too low, not supply.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. A deflationary gap is measured at the full-employment level of output: it is the amount by which planned spending falls short of that output.

  2. Planned spending is ex-ante aggregate demand. When ex-ante AD is insufficient for full-employment output, the shortfall is the deflationary gap. Option (A).

    1 mark

Answer: (A) ex-ante Aggregate Demand

Where the marks are

  • Deflationary gap = shortfall of ex-ante AD (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Determination of Income and Employment, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 58/1/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.