Advertisements
Advertisements
प्रश्न
Answer the following question:
What are the determinants of Aggregate Supply (AS)?
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.
Explain national income equilibrium through aggregate demand and aggregate supply. Use diagram. Also explain the changes that take place in an economy when the economy is not in equilibrium
State components of aggregate demand.
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.
Explain the role of 'Open Market Operations' in reducing Deflationary Gap
Explain the determinants of aggregate supply.
What are the determinants of Aggregate demand?
Explain with reason, whether you agree or disagree with the following statement:
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.
Explain the following concepts or give definitions.
Depreciation
What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?
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 | ||
Define or Explain the following concept:
Aggregate Demand
Define or Explain the following concept:
Aggregate Supply
Give reason or explain.
Aggregate demand is a positive function of the level of employment and output.
State with reason whether you agree or disagree with the following statement.
Aggregate supply is influenced by the state of technology only.
State with reason whether you agree or disagree with the following statement.
Positive net earnings from foreign transactions add to aggregate demand.
Discuss the working of the adjustment mechanism in the following situations:
Aggregate demand is greater than the aggregate supply.
What is meant by the “Effective Demand Principle” in the Keynesian theory of employment? Discuss using a schedule or a diagram.
Discuss the adjustment mechanism in the following situation :
Aggregate demand is lesser than Aggregate Supply.
The main component of aggregate demand is ______
On which concept does classical viewpoint depend?
In a closed economy, aggregate demand is the sum of ______.
An increase in aggregate demand of equilibrium level of income and employment causes an increase in ______
The difference between the Aggregate Demand at above full employment and Aggregate Demand at full employment is known as ______
What is meant by Equilibrium income?
How is it determined by using Saving and Investment approach?
In case of an under-employment equilibrium, which of the following alternatives is not true?
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 |
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 ______
It is seen that the private consumption expenditure, private investment expenditure, and ex-ante savings have reduced the ______ in the economy.
What is the circumstance when aggregate output is determined solely by the level of aggregate demand called?
If TR is 1,00,000₹ when ₹20,000 units are sold, then AR is equal to:
The slope of the supply curve is measured by ______.
When aggregate demand is greater than aggregate supply, inventories:
“In an economy ex-ante Aggregate Demand is less than ex-ante Aggregate Supply.”
Explain its impact on the level of output, income and employment.
“In an economy Planned spending is more than Planned output”.
Explain its impact on the level of output, income and employment.
If planned savings exceeds planned investments in an economy, explain its likely impact on income, output and employment.
With reference to Simple Keynesian model, give the meaning of ex-ante demand.
With the help of a diagram, determine the equilibrium level of output and income by using Aggregate demand and aggregate supply approach.
