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प्रश्न
Answer the following question:
What are the determinants of Aggregate Supply (AS)?
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उत्तर
Aggregate supply indicates the total amount of goods and services produced within an economy at a given the general (or overall) price level during an accounting period.
`AS = f(barN,barL,barK,barT)`
where,
AS = Aggregate supply
N = Natural resources
L = Labour
K = Stock of capital
T = State of technology
Natural resources: Natural resources include the gifts of nature such as fertile land, weather conditions, adequate rainfall, flora and fauna, perennial rivers etc. The abundant availability of all these factors act in favour of production. The aggregate supply of a country bestowed with these natural resources will be higher and vice-versa.
Labour: Availability of skilled and motivated labour is another determinant of supply. The supply in an economy with abundance of skilled labour will be high and vice-versa.
Capital: Capital is essential in the production process. Capital helps in acquiring raw materials, equipments, plant and machinery, buildings etc. which are essential for increasing the production. Greater the stock of capital, greater would be the level of output and production.
State of technology: The state of technology in an economy decides the level of supply. Advanced technology helps in improving the production efficiency in a a country. With better and advanced technology production can be increased while reducing the cost of production. This in turn positively affects the supply. Thus, the availability of modern and advanced technology helps in increasing the supply.
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संबंधित प्रश्न
State the determinants of aggregate demand.
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What are the determinants of Aggregate demand?
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Aggregate supply is influenced only by availability of natural resources.
State with reason whether you agree or disagree with the following statements. (any Three)
Aggregate demand depand only on the consumption expenture.
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The equality between aggregate demand and aggregate supply determines the equilibrium level of employment.
Write Short note on:
Average Propensity to Consume
Answer the following question:
What are the determinants of Aggregate Demand (AD)?
State with reason whether you agree or disagree with the following statement.
Aggregate demand depends only on the consumption expenditure.
Answer in detail.
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Write explanatory answer.
What is 'aggregate supply'? Explain the determinants of aggregate supply.
Answer the following question.
State and discuss the components of Aggregate Demand in a two-sector economy.
Answer the following question.
Describe the adjustments that may take place in an economy when ex-ante Aggregate Demand is greater than ex-ante Aggregate Supply.
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Discuss the adjustment mechanism in the following situation :
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Aggregate supply is equal to ______.
What is meant by Equilibrium income?
How is it determined by using Saving and Investment approach?
Identify the correctly matched pair from Column A to Column B:
| Column A | Column B |
| (1) Y = AD | (a) Level of output at full employment |
| (2) Forward Multiplier | (b) Withdrawal of investment decreases income |
| (3) Paradox of Thrift | (c) People save less or same as before |
| (4) Multiplier (k) < 1 | (d) 0 < MPC < 1 |
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With the help of a diagram, determine the equilibrium level of output and income by using Aggregate demand and aggregate supply approach.
