Class 12 Macro Economics - Chapter Determination of Income and Employment NCERT Solutions | Measure the level of ex-ante aggregate d

Explain ‘Paradox of Thrift’.

What is the difference between ex ante investment and ex post investment?

What do you understand by ‘parametric shift of a line’? How does a line shift when its (i) slope decreases, and (ii) its intercept increases?

What is ‘effective demand’? How will you derive the autonomous expenditure multiplier when price of final goods and the rate of interest are given?

What is marginal propensity to consume? How is it related to marginal propensity to save?

Explain why public goods must be provided by the government.

Differentiate between balance of trade and current account balance.

What are the four factors of production and what are the remunerations to each of these called?

What is a barter system? What are its drawbacks?

What is the difference between microeconomics and macroeconomics?

Distinguish between revenue expenditure and capital expenditure.

What are official reserve transactions? Explain their importance in the balance of payments.

Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.

What are the main functions of money? How does money overcome the shortcomings of a barter system?

What are the important features of a capitalist economy?

Explain the functions of a commercial bank.

What is a barter system? What are its drawbacks?

Write down some of the limitations of using GDP as an index of welfare of a country.

In the above example, if exports change to X = 100, find the change in equilibrium income and the net export balance.

How is the exchange rate determined under a flexible exchange rate regime?

Give the relationship between the revenue deficit and the fiscal deficit.

What is the marginal propensity to import when M = 60 + 0.06Y? What is the relationship between the marginal propensity to import and the aggregate demand function?

Define budget deficit and trade deficit. The excess of private investment over saving of a country in a particular year was Rs 2,000 crores. The amount of budget deficit was ( – ) Rs 1,500 crores. What was the volume of trade deficit of that country?

Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?

Suppose C = 100 + 0.75Y D, I = 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y . Calculate equilibrium income, the budget deficit or surplus and the trade deficit or surplus.