Question : Which of the following are the assumptions of determination of equilibrium output.
- Price level is assumed to be constant.
- The government expenditure is autonomous in nature.
- 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
Answer (1)
21st Jan, 2024
Correct Answer:
Only 1
Solution : The important points are-
- Price level is assumed to be constant
- It is assumed that investment expenditure is autonomous.
- It equilibrium output is to be determined in contest of short run.
Hence, Option C is correct.
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