Assume a two sector economy in the above diagram, the initial demand curve AD_1 shifts upward to AD_2 due to : Option 1: Increase in average propensity to save Option 2: Increase in aggugate supply Option 3: Increase in marginal propensity to consume Option 4: Increase in autonomous investment

The answer is 'Increase in autonomous investment'. View full solution:

CUET Economics - Assume a two sector economy in the above diagram, the initial demand curve AD_1 shifts upward to AD_2 due to : | PYQs + Solutions

CUET Economics

Macro

Medium

Increase in average propensity to save

Increase in aggugate supply

Increase in marginal propensity to consume

Increase in autonomous investment

✅ Correct Option: 4

Related questions:

16 May Shift 1

Put the alternatives given below in the sequence in which they occur to reach the equilibrium level of out put given that aggregate demand falls short of aggregate supply.

(A) In this case, the firm has to run down existing inventories, which will lead to a fall in production and hence income.

(B) Stocks will be piling up in the warehouses, causing unintended accumulation of inventories.

(C) Ex- ante demand for final goods falls short of the output of final goods that the producers have planned to produce in a given year.

(D) process continues till Ex- ante demand for final goods equals to ex -ante output of final goods

Choose the correct answer from the options given below:

30 May Shift 1

What will be the effect on Aggregate Demand when MPC decreases ?

30 May Shift 1

A perfectly elastic aggregate supply curve implies that:

(A) There is fuller utilization of resources in the economy.

(B) There is unemployment of resources in the economy.

(D) Aggregate demand is less in the economy.

Choose the correct answer from the options given below:

CUET Economics PYQs

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