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प्रश्न
Explain the subjective factors which determine consumption function.
Give reason or Explain the following statement :
There are many subjective factors determine consumption function.
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उत्तर १
The following are some of the subjective factors that determine consumption function:
- Motive of precaution: People save money for the future in order to meet unexpected expenditure.
- Motive of foresightedness: People cut down their spending in order to meet future requirements for money. For examples, requirements for higher education, marriage, buying a house etc.
- Motive of independence: As per this motive, man saves more in order to depict more power and independence.
- Motive of pride: Another motive that prevents people from spending is wanting to maintain the same economic stability in the future. Providing some wealth to their future generations or making donations gives them a feeling of pride.
- Motive of enterprise: People prevent current consumption and save for the purpose of investing. Under this motive, people save to invest in a profitable enterprise.
- Motive of calculation: Under this motive, people save to invest in shares and debentures in order to increase their income.
उत्तर २
There are many subjective factors that determine consumption function.
There are many subjective factors that determine consumption function. It is because subjective factors like motive or precaution, motive of foresight, motive of calculation motive of improvement, motive of independence, motive of enterprise, motive of pride etc. influence consumption function.
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संबंधित प्रश्न
State the determinants of aggregate demand.
What is aggregate supply?
Explain the concept of 'excess demand' in macroeconomics. Also explain the role of 'open market operation' in correcting it.
Explain the concept of ‘deficient demand’ in macroeconomics.
Explain how government spending can be helpful in removing deficient 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?
Define aggregate supply?
Explain the role of Repo Rate in reducing the Inflationary gap.
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
explain the role of Bank Rate in correcting deficient demand?
Explain the role of 'Margin Requirements' in removing this deficient demand gap.
Explain the role of 'Open Market Operations' in reducing Deflationary Gap
Explain the determinants of aggregate supply.
Discuss the situation when aggregate demand is more than aggregate supply at full employment income level.
Explain with reason, whether you agree or disagree with the following statement:
Aggregate supply is influenced only by availability of natural resources.
Write explanatory answer:
What is Aggregate demand ? Explain the determinants of Aggregate demand.
State whether the following statements are True or False with reason:
Income earned from foreign investment is considered for aggregate demand.
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
The General Theory of Employment, Interest and Money was written by __________.
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 | ||
State whether the following statement is true or false.
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 Supply (AS)?
Answer in detail.
Explain the determinants of aggregate demand.
Answer in detail.
Explain the equilibrium between Aggregate Demand and Aggregate Supply.
Explain the concept of deficient demand with the help of aggregate demand and aggregate supply curves. Discuss one physical and one monetary measure to correct it.
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.
Choose the correct from given options
When aggregate demand is greater than aggregate supply, inventories
The main component of aggregate demand is ______
On which concept does classical viewpoint depend?
An increase in aggregate demand of equilibrium level of income and employment causes an increase in ______
Aggregate supply is equal to ______.
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 ______
Which of the following statement is true?
“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.
Why is effective demand also known as expost demand?
If aggregate demand exceeds aggregate supply in a situation of full employment, what will be its impact on the economy?
