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प्रश्न
What is a ‘consumption function’?
What is meant by the term ‘consumption’?
What is a consumption function (propensity to consume)?
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उत्तर
A propensity to consume, or the consumption function, states the relationship between the aggregate consumption expenditure and aggregate income. This concept was introduced by Lord Keynes under his psychological law of consumption, which states that as income increases, consumption also increases but at a lesser rate than the increase in income.
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संबंधित प्रश्न
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
Explain the concept of ‘deficient demand’ in macroeconomics.
Why does consumption curve not start from the origin?
What is meant by inflationary gap?
State three measures to reduce inflationary gap.
Aggregate demand can be increased by ______
Explain the role of Repo Rate in reducing the Inflationary gap.
Explain the concept of deflationary gap.
Explain the role of Cash Reserve Ratio in removing an inflationary gap
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 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 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 with reason whether you agree or disagree with the following statements. (any Three)
Aggregate demand depand only on the consumption expenture.
What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?
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.
Give reason or explain.
Aggregate demand is a positive function of the level of employment and output.
Write Short note on:
Average 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.
Aggregate supply is influenced by the state of technology only.
Answer in detail.
What is Aggregate Supply? Explain the determinants of Aggregate Supply.
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.
Answer the following question.
State and discuss the components of Aggregate Demand in a two-sector economy.
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?
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 ______
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?
The slope of the supply curve is measured 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.
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?
With the help of a diagram, determine the equilibrium level of output and income by using Aggregate demand and aggregate supply approach.
