Aggregate Demand (AD) = C + I + G + (X – M)
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प्रश्न
What are the determinants of Aggregate demand?
सविस्तर उत्तर
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उत्तर
Aggregate demand refers to the total demand for all goods and services in an economy at a given overall price level and in a given period of time. The main determinants are:
- Consumer Spending (C): The total expenditure by households on goods and services. It depends on factors such as disposable income, savings, taxation, interest rates, and consumer confidence.
- Investment Spending (I): The expenditure by businesses on capital goods like machinery, buildings, and technology. It is influenced by interest rates, business expectations, and the availability of credit.
- Government Expenditure (G): Spending by the government on public goods and services like education, defence, and infrastructure. It directly increases aggregate demand.
- Net Exports (X–M): The difference between exports and imports. When exports exceed imports, aggregate demand rises, and when imports exceed exports, it falls.
- Monetary and Fiscal Policies: Expansionary monetary or fiscal policies (like lowering taxes or increasing the money supply) tend to increase aggregate demand, while contractionary policies decrease it.
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संबंधित प्रश्न
State the determinants of aggregate demand.
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Name any two components of 'aggregate demand'.
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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.
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Aggregate demand depand only on the consumption expenture.
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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 | ||
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Aggregate Demand and Aggregate Supply
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Average Propensity to Consume
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What are the determinants of Aggregate Demand (AD)?
State with reason whether you agree or disagree with the following statement.
Aggregate supply is influenced by the state of technology only.
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Positive net earnings from foreign transactions add to aggregate demand.
Answer in detail.
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Write explanatory answer.
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Answer the following question.
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Answer the following question.
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| 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.
