Question : Aggregate demand in a two sector model involves-
Option 1: Consumption and investment
Option 2: Investment and net exports
Option 3: Net exports and consumption
Option 4: Consumption and government
Correct Answer: Consumption and investment
Solution : Aggregate demand is a function of consumption expenditure and investment expenditure in a two sector model. Hence, Option A is correct.
Question : The equilibrium in the aggregate market occurs when:
Question : Identity the graphs A, B and C given in the question.
Question : In an open economy, aggregate demand is estimated as:
Question : In the aggregate expenditure model, equilibrium occurs when aggregate expenditure is equal to:
Question : Higher the disposable income, higher is ___________ expenditure.
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