Question

Economics determination numericals

Answer 1

Answer:

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Give the meaning of ex-ante savings.

Ans. : Ex-ante savings are the planned savings or expected savings

Give the meaning of deflationary Gap.

Ans. It is the gap between excess of aggregate supply over aggregate demand at full employment level.

What is Ex-ante aggregate demand?

Ans. It is planned or desired aggregate demand.

Give the meaning of Inflationary Gap.

Ans. It refers to the amount by which the actual aggregate demand exceeds the level of aggregate demand required to establish the full employment equilibruim.

What is meant by ex-ante investment?

Ans. : It is planned or desired investment during a particular period.

Define aggregate demand.

Ans. Aggregate demand is defined as the money value of total goods and services demanded by an economy during a given period.

What is propensity to consume?

Ans. Which shows the level of consumption at different levels of income in an economy.

Define marginal propensity to consume.

Ans. It is defined as measure of the rate at which aggregate consumption expenditure Changes as national income changes. MPC= C/Y

What is involuntary unemployment?

Ans . When people who are willing to work at the giving wage rate do not get work.

What is meant by excess demand in macro economics?

Ans. In macro economics, when aggregate demand is more than aggregate supply at full employment level, then there is excess demand.

What can be the minimum value of investment multiplier?

Ans. Investment multiplier K=1/1-mpc if mpc = 0 than K=1/1-0 = 1 which is minimum value of investment multiplier

Give the meaning of aggregate supply?

Ans. Aggregate supply is the money value of total supply of goods and services available for purchase by an economy during a given period.

Can the value of APS be negative?

Ans. Yes, when there are dis savings.

Write the relationship between MPS and multiplier?

Ans. K=1/1-MPC = 1/MPS or inverse relationship between MPS and the size of the multiplier