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प्रश्न
Give reason or explain.
Aggregate demand is a positive function of the level of employment and output.
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उत्तर
Aggregate demand or Aggregate Demand Function (ADF) is a positive function of the level of employment and output as, when the level of employment and output increases, it results in an increase in the income of workers. This increase in income leads to an increase in expenditure of workers and thereby increases the aggregate demand.
Aggregate demand function or aggregate demand can be written as AD = f(N) where,
AD is Aggregate Demand
N is employment and output
f represents the functional relationship between the aggregate demand and the level of output and employment.
The following diagram depicts the positive relationship between aggregate demand, employment and output.
APPEARS IN
संबंधित प्रश्न
State the determinants of aggregate demand.
Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.
State components of aggregate demand.
Derive the two alternative conditions of expressing national income equilibrium. Show these equilibrium conditions on a single diagram.
Why does consumption curve not start from the origin?
What is meant by inflationary gap?
Aggregate demand can be increased by ______
Define aggregate supply?
Explain the concept of deflationary gap.
Name any two components of 'aggregate demand'.
Explain the role of Cash Reserve Ratio in removing an inflationary gap
What is a ‘consumption function’?
Explain the subjective factors which determine consumption function.
Discuss the situation when aggregate demand is more than aggregate supply at full employment income level.
What are the determinants of Aggregate demand?
Explain the following concepts or give definitions.
Depreciation
State whether the following statements are True or False with reason:
Income earned from foreign investment is considered for aggregate demand.
How will you derive the autonomous expenditure multiplier when the price of final goods and the rate of interest are given?
Fill in the blank with appropriate alternatives given below
The General Theory of Employment, Interest and Money was written by __________.
Fill in the blank with appropriate alternatives given below
That part of income, which is not spent on consumption, is called __________.
Match the following Group:
| Group A | Group B | ||
| 1) | Aggregate Supply | a) | Expected receipts |
| 2) | Autonomous Investment | b) | Lord J. M. Keynes |
| 3) | Consumption | c) | Government Investment |
| 4) | A.P.C. | d) | ΔC/ΔY |
| 5) | Investment | e) | C/Y |
| f) | Addition to stock of capital | ||
| g) | Destruction of utility | ||
Distinguish between:
Aggregate Demand and Aggregate Supply
Write Short note on:
Marginal Propensity to Consume
Answer the following question:
What are the determinants of Aggregate Demand (AD)?
Answer the following question:
What are the determinants of Aggregate Supply (AS)?
State with reason whether you agree or disagree with the following statement.
Positive net earnings from foreign transactions add to aggregate demand.
Answer in detail.
Explain the determinants of aggregate demand.
Answer in detail.
Explain the equilibrium between Aggregate Demand and Aggregate Supply.
Discuss the working of the adjustment mechanism in the following situations:
Aggregate demand is greater than the aggregate supply.
Choose the correct from given options
When aggregate demand is greater than aggregate supply, inventories
On which concept does classical viewpoint depend?
In a closed economy, aggregate demand is the sum of ______.
Keynes theory is associated with ______
What is meant by Equilibrium income?
How is it determined by using Saving and Investment approach?
Which of the following are the definitions of money supply in India?
When the value of the currency falls as compared to other currencies, it is ______
A decrease in Cash Reserve Ratio will lead to ______
Which of the following statement is true?
It is seen that the private consumption expenditure, private investment expenditure, and ex-ante savings have reduced the ______ in the economy.
When aggregate demand is greater than aggregate supply, inventories:
“In an economy Planned spending is more than Planned output”.
Explain its impact on the level of output, income and employment.
With reference to Simple Keynesian model, give the meaning of ex-ante demand.
If aggregate demand exceeds aggregate supply in a situation of full employment, what will be its impact on the economy?
