Determination of Equilibrium Income and Employment

There is no content available!

To Access the full content, Please Purchase

  • Q1

    As a result of aggregate demand being greater than aggregate supply the

    Marks:1
    Answer:

    national income will increase.

    Explanation:
    When aggregate demand is greater than aggregate supply, the national income will increase leading to inflationary gap.
    View Answer
  • Q2

    National income is at its equilibrium when

    Marks:1
    Answer:

    aggregate demand and supply are equal.

    Explanation:
    Equilibrium literally means the state of balance. The national income is at equilibrium when aggregate demand is equal to aggregate supply.
    View Answer
  • Q3

    Say's law of market states that

    Marks:1
    Answer:

    supply creates its own demand.

    Explanation:
    When the supply is greater than the demand then automatically demand is created. Thus, supply creates its own demand.
    View Answer
  • Q4

    Increased unemployment and less motivation at work would shift aggregate

    Marks:1
    Answer:

    supply to the left.

    Explanation:
    Increased unemployment benefits and less motivation to work, leads to less people working and reduced aggregate supply.
    View Answer
  • Q5

    Increased levels of spending on imports will shift aggregate

    Marks:1
    Answer:

    demand to the left.

    Explanation:
    Increased levels of spending on imports, leads to less spending domestically and reduces domestic demand.
    View Answer