Chapter 1
Aggregate Demand and Aggregate Supply
Questions
Multiple Choice Question
1. Effective demand menifests itself in
(a) Consumption
(b) Investment
(c) Government expenditure
(d) Total spending
Answer: (d) Total spending
2. The point of effective demand is determined by
(a) Aggregate demand and supply functions
(b) Aggregate demand functions
(c) Aggregate supply functions
Answer: (a) Aggregate demand and supply functions
3. The point of effective demand can be determined at
(a) Full employment
(b) Below full employment
(c) Above full employment
(d) All the above levels.
Answer: (d) All the above levels
4. The aggregate demand function slopes
(a) Positively
(b) Negatively
(c) Neither of the two
Answer: (a) Positively
5. The aggregate supply function at full employment is
(a) More elastic
(b) Less elastic
(c) Perfectly inelastic
Answer: (c) Perfectly inelastic
(a) Under-Consumption
(b) Over-saving
(c) Both of them.
Answer: (c) Both of them
Very Short answer type Question
1. What is effectives demand ?
Answer:
2. Define aggregate demand ?
Answer:
3. What is aggregate supply ?
Answer:
4. How does effective demand determine employment ?
Answer:
5. What is paradox of poverty ?
Answer;
6. When is there under-employment equilibrium ?
Answer:
7. Can there exist over full employment equilibrium ?
Answer:
Short Answer type Questions
1. What is the meaning of aggregate demand and aggregate supply ?
Answer:
2. Effective demand menifests itself in total spending. Comment.
Answer:
3. How is the point of effective demand determined ?
Answer:
4. How does principles of effective demand refute Say's law of markets ?
Answer:
5. In What way Pigou's wage cut argument is rejected by the principle of effectives demand ?
Answer:
6. Full employment equilibrium is exceptional. Comment.
Answer:
Long Answer type Questions
1. What are the determinants of effective demand ?
Answer:
2. What is effectives demand ? How is the point of effective demand determined ?
Answer:
3. Explain clearly the aggregate demand function.
Answer:
4. Explain clearly the aggregate supply function.
Answer:
5. The under-employment equilibrium is realistic. Explain.
Answer:
6. Explain clearly the paradox of poverty.
Answer:
Very Long Answer Type Questions
1. What is meant by effective demand ? How is it determined ?
Answer:
2. What is effectives demand ? What is its importance ?
Answer:
3. Explain clearly the aggregate demand function and aggregate supply function.
Answer:
4. The point of effective demand is not determined necessarily at full employment. Discuss.
Answer;
5. "The logical starting point of Keynes' theory of employment is the principle of effective demand". Explain.
Answer:
6. What is effective demand ? In what way is it determined ? On what grounds is it criticised ?
Answer:
Question Type-Bhabesh Bora
Post ID : DABP005160
