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Match List I with List II

LIST I (Concept under Theory of Income determination)LIST II (Meaning)
A. Saving < InvestmentI. When AD<AS
B. 11mpc\frac{1}{1-mpc}II. Under employment equilibrium
C. National income will fallIII. Planned inventory would fall below the desired level
D. AD=AS at a point less than full employmentIV. Multiplier

Choose the correct answer from the options given below:

Solution

Correct Option: 2

A-III: If Saving < Investment, planned inventory falls below desired level. B-IV: 1/(1-MPC) is the multiplier. C-I: AD < AS causes national income to fall. D-II: AD=AS below full employment is underemployment equilibrium.

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