Advertisements
Advertisements
Questions
What is aggregate supply?
What is AS?
Advertisements
Solution
Aggregate supply represents the total value of goods and services produced within an economy over the course of a year. In simple terms, it is equivalent to the national product, which is also known as national income. Since the national product is distributed to individuals in the form of factor incomes, aggregate supply can also be understood as the sum of all factor incomes in the economy.
Aggregate Supply = National Product = Total Factor Incomes.
APPEARS IN
RELATED QUESTIONS
State the determinants of aggregate demand.
Given consumption curve, derive saving curve and state the steps taken in the process of derivation. Use Diagram.
What is meant by aggregate demand?
Explain how government spending can be helpful in removing deficient demand.
Derive the two alternative conditions of expressing national income equilibrium. Show these equilibrium conditions on a single diagram.
Why does consumption curve not start from the origin?
What is meant by inflationary gap?
Explain the concept of deflationary gap.
Explain the role of Cash Reserve Ratio in removing an inflationary gap
explain the role of Bank Rate in correcting deficient demand?
What is a ‘consumption function’?
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.
State whether the following statements are True or False with reason:
Income earned from foreign investment is considered for aggregate demand.
What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?
State whether the following statement is true or false.
The equality between aggregate demand and aggregate supply determines the equilibrium level of employment.
Define or Explain the following concept:
Aggregate Supply
Distinguish between:
Aggregate Demand and Aggregate Supply
Write Short note on:
Average Propensity to Consume
State with reason whether you agree or disagree with the following statement.
Positive net earnings from foreign transactions add to aggregate demand.
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.
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.
What is meant by the “Effective Demand Principle” in the Keynesian theory of employment? Discuss using a schedule or a diagram.
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 ______
Keynes theory is associated with ______
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?
A decrease in Cash Reserve Ratio will lead to ______
Which of the following statement is true?
It is seen that the private consumption expenditure, private investment expenditure, and ex-ante savings have reduced the ______ in the economy.
“In an economy Planned spending is more than Planned output”.
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 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.
