Advertisements
Advertisements
Question
What do you understand by ‘parametric shift of a line’? How does a line shift when its (i) slope decreases, and (ii) its intercept increases?
Advertisements
Solution
Considering the equation of a straight line as
b = ma + ε
Where m = slope of straight line, m > 0
ε = intercept on vertical axis, ε> 0
Also, when a increases by 1 unit, the value of b increases by m units.
The parameters εand m are parameters of a graph.
As the value of m increases, the straight line rotates upward around the same vertical intercept. This movement is an example of parametric shift of the graph.
(i) A straight line rotates downward around the same vertical intercept as its slope decreases.
(ii) A straight line shifts parallelly upward when its intercept increases.
APPEARS IN
RELATED QUESTIONS
Measure the level of ex-ante aggregate demand when autonomous investment and consumption expenditure (A) is Rs 50 crores, and MPS is 0.2 and level of income (Y) is Rs 4000 crores. State whether the economy is in equilibrium or not (cite reasons).
Answer the following question.
"Indian Rupee (₹) plunged to an all-time low of ₹ 74.48 against the US Dollar ($)".
− The Economic Times
In light of the above report, discuss the impact of the situation on Indian Imports.
Which of the following is NOT a stock variable?
"In an economy ex-ante Aggregate Demand is more than ex-ante Aggregate Supply."
Explain its impact on the level of output, income and employment.
In the determination of equilibrium income, equilibrium is established at the point where:
At the equilibrium point, which of the following conditions holds?
When autonomous investment rises, the Aggregate Demand curve:
Immediately after the AD curve shifts upward from AD₁ to AD₂, the situation at the old equilibrium point E₁ is characterised by:
To clear the excess demand that emerges after an autonomous rise in expenditure, firms respond by:
In the income–aggregate demand diagram, the points E₁ and E₂ respectively represent:
Given the consumption function \[C = 40 + 0.8Y\] and autonomous investment \[\overline{I} = 10\], the equilibrium level of income is:
At the old equilibrium point E₁, the segment E₁F in the diagram measures:
In the diagram, the increase in output and aggregate demand is shown by E₁G = E₂G, and this magnitude is:
The observation that the final increase in output and aggregate demand exceeds the initial increase in autonomous expenditure reflects:
In the graphical interpretation of the fixed price model, the Y-axis measures:
