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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.
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संबंधित प्रश्न
What is meant by aggregate demand?
State components of aggregate demand.
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?
What is meant by inflationary gap?
Define aggregate supply?
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 subjective factors which determine consumption function.
Explain the determinants of aggregate supply.
Explain with reason, whether you agree or disagree with the following statement:
Aggregate supply is influenced only by availability of natural resources.
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
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 | ||
State whether the following statement is true or false.
The equality between aggregate demand and aggregate supply determines the equilibrium level of employment.
Define or Explain the following concept:
Aggregate Supply
Distinguish between:
Aggregate Demand and Aggregate Supply
Write Short note on:
Average Propensity to Consume
State with reason whether you agree or disagree with the following statement.
Aggregate demand depends only on the consumption expenditure.
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.
Answer in detail.
Explain the determinants of aggregate demand.
Answer in detail.
What is Aggregate Supply? Explain the determinants of Aggregate Supply.
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
On which factor Keynesian Theory of Employment depends?
The main component of aggregate demand is ______
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?
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 ______.
Aggregate demand can be increased by:
“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.
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?
