HARD
Earn 100

Explain determination of equilibrium level of national income using aggregate demand and aggregate supply approach. Use diagram. Also explain the effect when aggregate demand is less than aggregate supply.

Important Questions on Determination of Income and Employment

HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income

From the following data about an economy, calculate:

(a) Equilibrium level of national income; and

(b) Total consumption expenditure at equilibrium level of national income. (C = 200 + 0.5Y is the consumption function where C is consumption expenditure and Y is national income.) Investment expenditure is 1,500.

MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
If at equilibrium level, National Income is Rs 2,000 crores, Autonomous Consumption is Rs 400 crores and Investment expenditure is Rs 200 crores, then Marginal Propensity to Consume will be:
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
Cash reserve ratio is the share of a bank's total _____ to be maintained as _____ in the form of liquid cash as per the guidelines of RBI. 
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
An economy is in equilibrium. Its consumption function is C = 300 + 0.8Y where C is consumption expenditure and Y is income and investment is Rs 700. Find national income
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
"Ex-Ante Savings and Ex-Ante Investments are always equal.” Defend or refute the given statement with valid reasons.
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
What will be the level of ex-ante aggregate demand when autonomous investment and consumption expenditure is Rs 100 Crore and MPS is 0.4 and level of income is Rs 4,000 crore.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
An economy is in equilibrium. Its national income is Rs 5,000 and autonomous consumption expenditure is Rs 500. What is the total consumption expenditure if marginal propensity to consumer is 0.7?
EASY
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
_____ refers to actual savings in an economy during a year. 
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
Explain the determination of equilibrium level of income by : Aggregate demand and aggregate supply approach.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
Voluntary _____ is that part of the working force not willing to engage itself in gainful _____.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
The consumption function is expressed as: C = 100 + 0.25Y (where C = consumption expenditure and Y = National Income). Calculate saving if consumption expenditure at equilibrium level of national income is Rs 500 crores.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income

Explain determination of equilibrium level of income using ‘Consumption plus Investment’ approach. Use diagram.

OR

Explain, with the help of a diagram, how equilibrium level of income is determined considering aggregate demand and aggregate supply.

EASY
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
If C = 20 + 0.80Y and Investment Expenditure is Rs 50 crores, then Equilibrium Income is:
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
C = 50 + 0.5Y is the consumption function where C is consumption expenditure and Y is National Income and investment expenditure is 2,000 in an economy. Calculate: (i) Equilibrium level of (national) income; (ii) Consumption expenditure at equilibrium level of (National) income.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
_____ supply is the money value of total supply of goods and services available for _____ by an economy. 
EASY
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
Find autonomous consumption expenditure, if at equilibrium, National Income is Rs 1500 crores; investment expenditure is Rs 300 crores; Marginal Propensity to Consume is 0.7.
EASY
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
Under the Keynesian framework, income is measured along the _____(horizontal/vertical) line.
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
The sum of marginal propensity _____ and marginal propensity _____ is always equal to one. 
MEDIUM
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
If MPS = 0.30, Autonomous Consumption = Rs 50 crores and Investment = Rs 100 crores, then Equilibrium Income will be:
 
HARD
Economics>Macroeconomics>Determination of Income and Employment>Determination of Equilibrium Income
In an economy, the consumption function is C = 600 + 0.9Y, where C is consumption expenditure and Y is income. Calculate the equilibrium level of income and consumption expenditure, when investment expenditure is 500.