Read the following statements carefully:
Statement 1: Ex-post savings and Ex-post investments are equal at all levels of income.
Statement 2: Under the effective demand principle, the equilibrium output is equal to ex-ante Aggregate Demand (AD). In the light of the given statements, choose the correct alternative from the following:
Read the following statements carefully:
Statement 1: Ex-post savings and Ex-post investments are equal at all levels of income.
Statement 2: Under the effective demand principle, the equilibrium output is equal to ex-ante Aggregate Demand (AD). In the light of the given statements, choose the correct alternative from the following:
Show Hint
- Statement 1 is true and Statement 2 is false.
- Statement 1 is false and Statement 2 is true.
- Both Statements 1 and 2 are true.
- Both Statements 1 and 2 are false.
The Correct Option is C
Solution and Explanation
- Statement 1 is true: Ex-post savings and investments are equal because savings always equal investment in an economy when accounting for all income. The total savings will be used for investments.
- Statement 2 is true: Under the effective demand principle, the equilibrium output is determined when ex-ante Aggregate Demand (AD) equals actual output, i.e., the economy is at full employment.
Conclusion: Both statements are correct: Ex-post savings and investment are equal, and the equilibrium output is determined by ex-ante Aggregate Demand.
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Statement 1: Ex-post savings and Ex-post investments are equal at all levels of income.
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Questions Asked in GATE XH-C1 exam
The 12 musical notes are given as \( C, C^\#, D, D^\#, E, F, F^\#, G, G^\#, A, A^\#, B \). Frequency of each note is \( \sqrt[12]{2} \) times the frequency of the previous note. If the frequency of the note C is 130.8 Hz, then the ratio of frequencies of notes F# and C is:
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Select the most appropriate option to complete the above sentence. Here are two analogous groups, Group-I and Group-II, that list words in their decreasing order of intensity. Identify the missing word in Group-II.
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__________ \( \rightarrow \) Praise \( \rightarrow \) Appreciate
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