Advertisements
Advertisements
Questions
Define or Explain the following concept:
Aggregate Demand
Explain aggregate demand.
Advertisements
Solution
Aggregate demand: Aggregate demand implies the total demand of final goods and services by various individuals in all the sectors in an economy. It expresses the total demand in terms of money. In this manner, it can be defined as the actual aggregate expenditure incurred by all the people in an economy on different goods and services.
AD = C + I + G + (X – M)
Where,
Demand by households - Private consumption expenditure (C)
Demand by firms - Private investment expenditure (I)
Demand by government - Government expenditure (G)
Demand by foreign sector- Net exports (X – M)
Where, X is exports and M is imports.
RELATED QUESTIONS
What is aggregate supply?
Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.
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 'excess demand' in macroeconomics. Also explain the role of 'open market operation' in correcting it.
Explain the concept of ‘deficient demand’ in macroeconomics.
What is meant by aggregate demand?
State components of aggregate demand.
Why does consumption curve not start from the origin?
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 Bank Rate in correcting deficient demand?
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?
State with reason whether you agree or disagree with the following statements. (any Three)
Aggregate demand depand only on the consumption expenture.
Explain the following concepts or give definitions.
Depreciation
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 __________.
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 | ||
Give reason or explain.
Aggregate demand is a positive function of the level of employment and output.
Answer the following question:
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.
Answer in detail.
Explain the determinants of aggregate demand.
Answer in detail.
Explain the equilibrium between Aggregate Demand and Aggregate Supply.
Write explanatory answer.
What is 'aggregate supply'? Explain the determinants of aggregate supply.
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.
Answer the following question.
Describe the adjustments that may take place in an economy when ex-ante Aggregate Demand is greater than ex-ante Aggregate Supply.
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 ______
Keynes theory is associated with ______
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?
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 ______
It is seen that the private consumption expenditure, private investment expenditure, and ex-ante savings have reduced the ______ in the economy.
If TR is 1,00,000₹ when ₹20,000 units are sold, then AR is equal to:
“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.
Why is effective demand also known as expost demand?
With reference to Simple Keynesian model, give the meaning of ex-ante demand.
With the help of a diagram, determine the equilibrium level of output and income by using Aggregate demand and aggregate supply approach.
