Tag: unemployment and employment generation

Questions Related to unemployment and employment generation

Increase in margin requirements helps to control the situation of deficient demand.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: B
Explanation:

Margin requirements needs to be reduced to enhance the credit creating power of commercial banks and to correct the deficient demand.

If planned investment falls short of planned saving, then stock of goods tend to pile up.

economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: A
Explanation:

True. 

When Planned investment is less than the planned savings , then the planned inventory will accumulate as their will be less consumption due to high savings in the economy.

When aggregate demand is greater than aggregate supply, inventories: 

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. Fall

  2. Rise

  3. Do not change

  4. First fag, then rise

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Correct Option: A
Explanation:

When Aggregate demand  is more than Aggregate supply, then the planned inventory would fall below the desired level as the demand is more than the supply in the market. To bring back the Inventory at the desired level, the producers expand the output More output means more income. Rise in output means rise in AS and rise in income means rise in AD. 

If net income from abroad is negative it means value of exports is less than value of imports.

economics income determination unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: A

Aggregate demand in an economy is measured in terms of the total expenditure on goods and services.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: A
Explanation:

True.

Aggregate Demand refers to the desired level of expenditure in the economy during an accounting year. It is what people wish to spend on the purchase of goods and services during an accounting year.

_______________ is the minimum amount of money, which all the entrepreneurs in the economy must receive from the sale of output produced by them, at any given level of employment.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. Aggregate supply price

  2. Aggregate profit

  3. Aggregate demand price

  4. Aggregate income

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Correct Option: A
Explanation:

Aggregate supply price refers to the minimum value of money which all the entrepreneurs  in the economy must expect from the sale of output produced by them using the factors of production, at any given level of employment. This is the rate of return from the  business according to which the firms make their long term and short term plans. 

Aggregate demand function represents a ________ relationship between the level of output and employment and the aggregate demand price.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. positive

  2. negative

  3. constant

  4. non-linear

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Correct Option: A
Explanation:

Aggregate demand function represents the relation between the level of out produced in an economy to the level of employment in the economy and aggregate demand price where the level of output and level of employment has a direct relationship due to which if one increases then the other one also increases and vice versa as employees directly contribute in the production of output and level of output and demand price have an inverse relationship as level of output increases in the economy then the aggregate demand price decreases due to demand deficiency and vice versa.

Aggregate demand function is represented by a downward sloping curve.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. True

  2. False

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Correct Option: B
Explanation:

False.

AD curve is upward sloping owing to increasing income in the economy. As the income increases, the expenditure by the people also increases which leads to rising AD and vice versa. Therefore, income and AD has a positive relationship between them due to which AD curve is upward sloping. 

Aggregate supply curve becomes a ____________, after the full employment level has been achieved in the economy.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. vertical line

  2. downward sloping curve

  3. horizontal line

  4. none of the above

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Correct Option: A
Explanation:

Aggregate supply refers to the desired level of output in the economy during an accounting year. It is through this output only that the producer sector generates income. Aggregate supply function is a upward sloping curve which denotes the direct relation between the level of output produced in the economy and income generates. The curve become vertical after full employment level of output indicating the maximum amount of output which can be produced in the economy generating the respective national income. 

The aggregate demand curve intercepts on the _________.

economics concept of excess demand and deficient demand unemployment and employment generation the short run fixed price analysis of the product market liquidity preference and profit

  1. Y-axis

  2. X-axis

  3. point of origin

  4. none of the above

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Correct Option: A
Explanation:

Aggregate Demand refers to the desired level of expenditure in the economy during an accounting year. It is what people wish to spend on the purchase of goods and services during an accounting year.

Aggregate demand= C+I+G+ (X-M) where

C= Consumption expenditure

I= Investment expenditure

G= Government expenditure

(X-M)= Net export

Aggregate demand curve is upward sloping showing a positive relation between level of income and overall expenditure in the economy. The curve intercepts on Y-axis because even at zero level of income, there is some consumption which is required for the very existence of life.