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

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

Explain ‘Paradox of Thrift’.

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?

Discuss the issue of deficit reduction.

Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.

Suppose that for a particular economy, investment is equal to 200, government purchases are 150, net taxes (that is lump-sum taxes minus transfers) is 100 and consumption is given by C = 100 + 0.75Y (a) What is the level of equilibrium income? (b) Calculate the value of the government expenditure multiplier and the tax multiplier. (c) If government expenditure increases by 200, find the change in equilibrium income.

Differentiate between devaluation and depreciation.

Explain why public goods must be provided by the government.

Describe the four major sectors in an economy according to the macroeconomic point of view.

Describe the Great Depression of 1929.

Suppose marginal propensity to consume is 0.75 and there is a 20 per cent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20 (b) Transfers decrease by 20.

Explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard.

Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.