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.
Top Questions on Demand curve
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:- GATE XH-C1 - 2024
- Economics
- Demand curve
- Define Effective Demand Principle.
- GATE XH-C1 - 2024
- Economics
- Demand curve
Read the following statements carefully:
Statement 1: Expost savings and Expost investments are equal at all levels of income.
Statement 2: Under the effective demand principle, the equilibrium output is equal to exante Aggregate Demand (AD). In the light of the given statements, choose the correct alternative from the following:- GATE XH-C1 - 2024
- Economics
- Demand curve
- Consider a duopoly market where Firm 1 and Firm 2 produce differentiated products such that the demand function of each firm is given by :
q1(p1, p2) = 18 - p1 + p2
q2(p1, p2) = 18 + p1 - p2
Here, q1 and q2 are the outputs produced by Firm 1 and Firm 2, respectively, and p1 and p2 are the corresponding per unit prices.
Cost of production for the ith firm is given by Ci(qi) = 2qi ∀ i = 1,2
The firms compete in prices. The price set by Firm 2 such that the market is in Nash equilibrium will be ________ (in integer).- GATE XH-C1 - 2024
- Macroeconomics
- Demand curve
- In a perfectly competitive market, suppose the market demand curve is given by P = 10 + W - Q, where P is the market price, W is the average wealth of the consumers in the market, and Q is the industry output. The total cost function for a representative firm is given by C(q) = q3 - 2q2 + 5q, where q is the output of a firm. If W = 80, then the total number of firms in this industry in the long-run will be ______ (in integer)
- GATE XH-C1 - 2024
- Macroeconomics
- Demand curve
Questions Asked in GATE XH-C1 exam
- Consider a two good economy where a denotes consumption of apricots and b denotes consumption of bananas. Anu's utility function is UAnu (a, b) = a + 2b, and Binu's utility function is UBinu (a, b) = min{a, 2b}. Anu initially has no apricots and 12 bananas. Binu initially has 12 apricots and no bananas. In the competitive equilibrium, which one of the following will be Anu's optimal consumption bundle ?
- GATE XH-C1 - 2024
- Utility Function
- Given an input line of numbers and words, a machine rearranges them following particular rule in each step. Here is an illustration of an input and rearrangement sequence (Step 1 to Step 5) :
Input: 61 wb ob 48 45 29 34 sb pb lb
Step 1: lb wb ob 48 45 29 34 sb pb 61
Step 2: lb ob wb 45 29 34 sb pb 61 48
Step 3: lb ob pb wb 29 34 sb 61 48 45
Step 4: lb ob pb sb wb 29 61 48 45 34
Step 5: lb ob pb sb wb 61 48 45 34 29
Step 5 is the last step of the above arrangement.
Based on the rules followed in the above steps, answer the following question :
Input: cb kb eb 58 49 23 38 jb nb gb 69 82
Which of the following represents the position of 58 in the fourth step? (Step-5 is the last step of the arrangement.)- GATE XH-C1 - 2024
- Sequence and Series
- How can businesses benefit from green finance?
- GATE XH-C1 - 2024
- Reading Comprehension
- Read the following passage carefully:
1. India has aimed to reduce the country’s carbon intensity by approximately 45 percent by 2030. To achieve this, ‘Green finance’ plays a vital role. At the initial stages, green finance needs a big push from the government. The Indian government has identified projects worth Rs. 25,000 crore that will be financed by proceeds from Sovereign Green Bonds.
2. According to the framework approved by the finance ministry, the sovereign green bonds will focus on financing public projects including renewable energy, climate change, clean transportation, sustainable water and waste management, and pollution control.
3. Businesses that take green finance can benefit in various ways. It can help them follow different environmental norms and regulations, thus avoiding possible fines. Adopting sustainable developmental practices enhances the brand value of businesses. Customers tend to prefer brands that adopt clear sustainable development practices. The energy-efficient and other sustainable development practices promoted by green finance also often help in saving costs and boosting the profitability of businesses.
4. -The Economic Times, April 22, 2023 (Modified) On the basis of the given text and common understanding, answer the following questions:- GATE XH-C1 - 2024
- Reading Comprehension
- "Navratan Policy of the government has helped in improving the performance of Public Sector Undertakings (PSUs) in India." Do you agree with the given statement? Justify your answer with valid arguments.
- GATE XH-C1 - 2024
- National Income Accounting