Arts (English Medium) Class 12 - CBSE Question Bank Solutions for Economics

What is 'consumption function'?

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

What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?

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

Discuss the working of the adjustment mechanism in the following situations:
Aggregate demand is greater than the aggregate supply.

Answer the following question.
Describe the adjustments that may take place in an economy when ex-ante Aggregate Demand is greater than ex-ante Aggregate Supply.

Answer the following question.
What is meant by the "Effective Demand Principle" in the Keynesian theory of employment? Discuss using a schedule or a diagram.

Choose the correct from given options
When aggregate demand is greater than aggregate supply, inventories

Discuss the adjustment mechanism in the following situation :
Aggregate demand is lesser than Aggregate Supply.

On which factor Keynesian Theory of Employment depends?

The main component of aggregate demand is ______ 

On which concept does classical viewpoint depend?

In a closed economy, aggregate demand is the sum of ______.

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

Keynes theory is associated with ______ 

The difference between the Aggregate Demand at above full employment and Aggregate Demand at full employment is known as ______ 

“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. 

“In an economy Planned spending is more than Planned output”.

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

If planned savings exceeds planned investments in an economy, explain its likely impact on income, output and employment.

A Consumer consumes only two goods X and Y. Marginal utilities of X and Y is 4 and 5 respectively. The prices of X and Y are Rs 4 per unit and Rs 5 per unit respectively. Is the consumer in equilibrium? What will be the further reaction of the consumer? Explain.