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:

CUET Economics 2022 Slot 2

Match List I with List II

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

Choose the correct answer from the options given below:

CUET Economics 2024 Slot 1

When there is unexpected rise in the sales

CUET Economics 2022 Slot 4

What would be the value of investment multiplier if MPC = MPS ?