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प्रश्न
Explain the determinants of aggregate supply.
Write short Answer for the following question:
What are the determinants of aggregate supply?
उत्तर
The main determinants of the aggregate supply are briefly explained as follows:-
1. Natural Resources:-
Natural Resources refer to all kinds of resources, which are freely available in the nature and used in the process of production. They include land, climatic conditions, rainfall, water resources, sunshine, and minerals deposits. Etc. total production of goods and services in the economy depends on the availability of natural resources as well as their utilization. Since it is difficult to change the size of the natural resources, theyare considered to be constant.
2. Supply of Labour:-
It refers to total labour force and human resources (HR) available and used in the production of goods and services in the economy. The supply of labour depends on the size of the population, age composition of the population, education and training of the labour force. The size of and efficiency of the labour are very essential for increasing production. It is assumed that the supply of labour can be changed in the short run.
3. Capital:-
Capital is the produced means of production. It is a man-made factor of production. The aggregate supply of goods and services produced in the country depends on the availability and use and quality of capital. Therefore, more the capital more is the supply of goods, and less capital available, less would be the supply.The stock of capital is considered to be constant in short period.
4. State of Technology:-
The state of technology implies the application of modern and advanced techniques and methods in the production process. The application of improved technology increase overall productivity. In the short term, the state of technology is assumed be constant.
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Write explanatory answer:
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Income earned from foreign investment is considered for aggregate demand.
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| Group A | Group B | ||
| 1) | Aggregate Supply | a) | Expected receipts |
| 2) | Autonomous Investment | b) | Lord J. M. Keynes |
| 3) | Consumption | c) | Government Investment |
| 4) | A.P.C. | d) | ΔC/ΔY |
| 5) | Investment | e) | C/Y |
| f) | Addition to stock of capital | ||
| g) | Destruction of utility | ||
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The equality between aggregate demand and aggregate supply determines the equilibrium level of employment.
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Aggregate Demand
Define or Explain the following concept:
Aggregate Supply
Give reason or explain.
Aggregate demand is a positive function of the level of employment and output.
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Marginal Propensity to Consume
Answer the following question:
What are the determinants of Aggregate Supply (AS)?
State with reason whether you agree or disagree with the following statement.
Aggregate demand depends only on the consumption expenditure.
State with reason whether you agree or disagree with the following statement.
Aggregate supply is influenced by the state of technology only.
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Positive net earnings from foreign transactions add to aggregate demand.
Answer in detail.
Explain the determinants of aggregate demand.
Answer in detail.
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Write explanatory answer.
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Answer the following question.
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Answer the following question.
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Aggregate demand is greater than the aggregate supply.
Answer the following question.
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With the help of a diagram, determine the equilibrium level of output and income by using Aggregate demand and aggregate supply approach.
