Comprehension

When at a particular price level, aggregate demand for final goods equals aggregate supply of final goods, the final goods or product in market reaches its equilibrium. Aggregate demand for final goods consist of ex-ante consumption, ex-ante investment, government spending etc. The rate of increase in ex-ante consumption due to a unit increase in income is called marginal propensity to consume.

Question: 1

Equilibrium in product market achieved when.

Updated On: Apr 12, 2024
  • AD = AS
  • \(AD > AS\)
  • \(AD <AS\)
  • \(S>I\)
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is A

Solution and Explanation

The Correct Option is (A): AD = AS
Was this answer helpful?
0
0
Question: 2

Final goods are those goods.

Updated On: Apr 12, 2024
  • Which are used in the process of production
  • Which are used as an intermediate good
  • Which are purchased for the purpose of reselling in the same year
  • Which are either used for consumption or for investment
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is D

Solution and Explanation

The Correct Option is (D): Which are either used for consumption or for investment
Was this answer helpful?
0
0
Question: 3

Aggregate demand for final goods doesn't include.

Updated On: Apr 12, 2024
  • Consumption
  • Saving
  • Investment
  • Government spendings
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is B

Solution and Explanation

The Correct Option is (B): Saving
Was this answer helpful?
0
0
Question: 4

MPC stands for.

Updated On: Apr 12, 2024
  • Marginal Propensity to Converse
  • Marginal Propensity to Consume
  • Marginal Propensity to Compensate
  • Marginal Propensity to correction
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is B

Solution and Explanation

The Correct Option is (B): Marginal Propensity to Consume
Was this answer helpful?
0
0
Question: 5

The sum total of MPC and MPS is always equal to:

Updated On: Apr 12, 2024
  • Zero
  • Infinity
  • One
  • Two
Hide Solution
collegedunia
Verified By Collegedunia

The Correct Option is C

Solution and Explanation

The Correct Option is (C): One
Was this answer helpful?
0
0

Top Questions on Reading Comprehension

View More Questions