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Statement 1: Consumption function assumes that, consumption changes at a constant rate as income changes.
Statement 2: Autonomous consumption is the ratio of total consumption (C) to total income (Y).
In light of the given statements, choose the correct alternative from the following:
Concept: Aggregate Demand and Its Components >> Consumption
Graphically, Aggregate Demand function can be obtained by vertically adding the ______ and ______ function.
Concept: Determination of Equilibrium Income in the Short Run >> Macroeconomic Equilibrium with Price Level Fixed
Suppose for a given economy,
S = -60 + 0.1Y
I = ₹ 4,000 crore
(Where S = Saving Function, Y = National Income and I = Investment Expenditure)
Equilibrium level of Income would be ₹ ______ crore.
Concept: Determination of Equilibrium Income in the Short Run >> Effect of an Autonomous Change in Aggregate Demand on Income and Output
Under ______ in China, farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices.
Concept: Developmental Path - a Snapshot View
From the set of the events given in column I and corresponding facts given in Column II, choose the correct pair of statements:
| Column I | Column II | ||
| A. | Adoption of mixed economic system | I. | The common development policy of India and China |
| B. | Introduction of economic reforms in China | II. | Imposed by World Bank |
| C. | Great Leap Forward Campaign | III. | Focussed on massive industrialization |
| D. | First Five Year Plan of Pakistan | IV. | Announced in 1953 |
Concept: Developmental Path - a Snapshot View
“During the colonial period, a number of socio-economic indicators were in a dilapidated state.”
List any three such indicators that led to the worsening of India’s demographic profile.
Concept: Demographic Indicators
“In the late 1970s, China introduced the One-child policy that led to arrest in the population coupled with skewed sex ratio.”
Justify the given statement with valid arguments in support of your answer.
Concept: Demographic Indicators
What is capital expenditure?
Concept: Classification of Expenditure
X and Y are complementary goods. The price of Y falls. Explain the chain of effects of this change in the market of X.
Concept: Equilibrium Price
Explain the chain of an effect of excess demand of a good on it equilibrium price.
Concept: Equilibrium Price
Give the equation of Budget Line.
Concept: Types of Budget
Explain the role of the government budget infighting inflationary and deflationary tendencies.
Concept: Objectives of Government Budget
Calculate investment expenditure from the following date about an economy which is in equilibrium :
National Income = 1000
Marginal propensity to save = 0.20
Autonomous consumption expenditure = 100
Concept: Classification of Expenditure
Calculate Autonomous Consumption Expenditure from the following data about an economy which is in equilibrium:
National income = 500
Marginal propensity to save = 0.30
Investment expenditure = 100
Concept: Classification of Expenditure
What is meant by 'excess supply' of a good in a market?
Concept: Market Equilibrium
Explain its chain of effects on the market of that good. Use diagram
Concept: Market Equilibrium
What is the difference between revenue expenditure and capital expenditure? Explain how taxes and government expenditure can be used to influence.
Concept: Classification of Expenditure
Equilibrium price of an essential medicine is too high. Explain what possible steps can be taken to bring down the equilibrium price but only through the market forces. Also explain the series of changes that will occur in the market.
Concept: Equilibrium Price
Answer the following question.
Explain the meaning and implications of the maximum price ceiling and minimum price ceiling.
Concept: Price Ceiling
State whether the following statement is true or false. Give reasons for your answer :
When the equilibrium price is greater than the market price there will be excess supply in the market.
Concept: Equilibrium Price
