English

Why Does Consumption Curve Not Start from the Origin? - Economics

Advertisements
Advertisements

Question

Why does consumption curve not start from the origin?

Solution

Consumption curve does not start from the origin because there is autonomous consumption expenditure even when the nationa income is zero.

shaalaa.com
  Is there an error in this question or solution?
2017-2018 (March) All India Set 3

RELATED QUESTIONS

What is aggregate supply? 


Explain national income equilibrium through aggregate demand and aggregate supply. Use diagram. Also explain the changes that take place in an economy when the economy is not in equilibrium


Explain the concept of 'deficient demand' in macroeconomics.


Derive the two alternative conditions of expressing national income equilibrium. Show these equilibrium conditions on a single diagram.


Explain the concept of Deflationary Gap


Explain the subjective factors which determine consumption function.


Discuss the situation when aggregate demand is more than aggregate supply at full employment income level.


State whether the following statements are True or False with reason: 

Income earned from foreign investment is considered for aggregate demand. 


State whether the following statement is true or false.

The equality between aggregate demand and aggregate supply determines the equilibrium level of employment.


State with reason whether you agree or disagree with the following statement.

Positive net earnings from foreign transactions add to aggregate demand.


Answer the following question.
State and discuss the components of Aggregate Demand in a two-sector economy.


The main component of aggregate demand is ______ 


An increase in aggregate demand of equilibrium level of income and employment causes an increase in ______ 


Aggregate supply is equal to ______.


How is it determined by using Saving and Investment approach?


Identify the correctly matched pair from Column A to Column B:

Column A Column B
(1) Y = AD (a) Level of output at full employment
(2) Forward Multiplier (b) Withdrawal of investment decreases income
(3) Paradox of Thrift (c) People save less or same as before
(4) Multiplier (k) < 1  (d) 0 < MPC < 1

A decrease in Cash Reserve Ratio will lead to ______


If TR is 1,00,000₹ when ₹20,000 units are sold, then AR is equal to:


The equilibrium level of income/output is established when ______


“In an economy ex-ante Aggregate Demand is less than ex-ante Aggregate Supply.”

Explain its impact on the level of output, income and employment. 


Share
Notifications

Englishहिंदीमराठी


      Forgot password?
Use app×