Components of aggregate demand
What are the components of aggregate demand (AD)? Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer to the Investment Demand.
What are the components of aggregate demand (AD)?
Answer: The components of AD are as follows:AD = C + I + G + (X - M) By Simplifying AD = C + I, Here C refers to Household consumption demand and I refer to the Investment Demand.
Define Break Even point? Elucidate with the help of saving function. Answer: Breakeven point is a point where consumption equals to income and saving is equivalent t
Multiplier: The Multiplier is the ratio of change in income by the change in investment. Multiplier (k) = ΔY/ΔI
Describe cost-push inflation and its major source.
Illustrate which budget expenses does not result in the creation of assets or reduction of liability. Give illustrations too.
The economic effects of inflation are all pervasive. It affects all those who depend on the market for their livelihood. The effects of inflation may be favorable or unfavorable, and low or high depending on the rate of inflation. For example a galloping the hyper inf
Why the value of MPC is not greater than 1? Answer: This is because change in consumption can never be more than change in income.
Why is interest received classified as revenue receipt? Answer: Interest received is a revenue receipt since it does not build any liability nor it leads to the red
Explain the concept of “economies of scale” and “increasing returns”.
Describe Okun's law? Give an illustration of how it works.
Between 1961 and 2007, the rising share of the Canadian population in paid employment contributed to rising GDP per person. But suppose that the share of the Canadian population in paid employment had remained constant between 1961 and 2007. What would Canadian GDP pe
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