Concept of deflationary gap
Elucidate the concept of deflationary gap. Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium.
Elucidate the concept of deflationary gap.
Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium.
The market system's answer to the fundamental question "How will the system promote progress?" is essentially:
If $9 is required to buy £2, what is the exchange rate for USA dollar? Answer: £1 = 9/2 = $4.5, i.e., £1 = $4.5.
When in an economy intended investment is more than intended savings, then what is the consequence of it on the national income? Answer: When I > S, the level of
The country’s balance of trade is Rs.500 crores. The value of exports of goods is Rs. 650 crores. What is the value of imports of goods?
In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?
If the liability to give a tax is on one person and the burden of tax fall on some other person, state the kind of tax? Answer: These are indirect taxes like sales
Distinguish between full-employment equilibrium and Under-employment equilibrium. Whenever equality among AD and AS is at full employment level it is termed as full employment equilibrium. Although whenever equali
Explain the concept of “economies of scale” and “increasing returns”.
Give a short history of how banking evolved into the sophisticated operation. Start first with the Goldsmith and sum up with the Banking system which we experience nowadays.
Why the value of MPC is not greater than 1? Answer: This is because change in consumption can never be more than change in income.
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