Question : Decrease in _________, will reduce the aggregate demand in the economy.
Option 1: Taxation
Option 2: Government spending
Option 3: Both A and B
Option 4: Neither A nor B
Correct Answer: Government spending
Solution : Decrease in government spending will reduce the aggregate demand in the economy. Households needs to pay for those services which was earlier paid by the government. Hence, Option B is correct.
Question : Decrease in ____________, will increase the aggregate demand in the economy.
Question : According to this approach, the equilibrium level of income in an economy is determined where aggregate demand is equal to aggregate supply.
Question : Statement 1: An increase in government spending will lead to a rightward shift in the aggregate demand curve.
Statement 2: An increase in aggregate supply will lead to a decrease in the price level.
Which statement is correct?
Question : Demand-pull inflation occurs when:
Question : Which of the following are the components of aggregate demand?
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