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Question : Which of the following are the assumptions of determination of equilibrium output.

  1. Price level is assumed to be constant.
  2. The government expenditure is autonomous in nature.
  3. Equilibrium output is to be determined in context of long run.

 

Option 1: Only 2
 

Option 2: Only 1&3
 

Option 3: Only 1
 

Option 4: All 1,2&3
 


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Only 1


Solution : The important points are-

  1. Price level is assumed to be constant
  2. It is assumed that investment expenditure is autonomous.
  3. It equilibrium output is to be determined in contest of short run.

Hence, Option C is correct.

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