"The Government has raised the exemption limit for the payment of Income tax from ₹ 2 lakh to ₹ 2.5 lakh." If the situation of deficient demand is…

In the given situation of deficient demand, an increase in the exemption limit by the Government would lead to decrease in the tax burden on the households, resulting an increase in disposable income. Thus, Aggregate Demand (AD) will increase and deficient demand will be managed accordingly.