Macro

Income & Employment

Medium

Deficit Demand Occurs when :

(A) Equilibrium level of output is less than full employment level

(B) When AD < AS (Aggregate Demand less than Aggregate Supply)

(C) When output decreases

(D) Demand is not enough to employ all factors of production

(E) Prices will decline in the long run

Choose the correct answer from the options given below :

(A), (B), (D), (E) only

(A), (C), (D), (E) only

(B), (C), (D), (E) only

(A), (B), (C), (D) only

✅ Correct Option: 1

Deficit demand (deflationary gap) occurs when: (A) equilibrium output is less than full employment level, (B) AD is less than AS at full employment, (D) demand is insufficient to employ all factors, and (E) prices decline in the long run. Statement (C) that output decreases is not a defining feature - output is simply below full employment level. Hence A, B, D, E only.

2022: 30 Aug Shift 2

From the equations given below, choose the equation which correctly represents the consumption function.

2025: 26 May Shift 2

If the entire additional income is saved in an economy, the value of investment multiplier will be

2023: 1 June Shift 1

If MPC and MPS are equal, then the value of multiplier is :

2025: 13 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Marginal propensity to consume	(I) Change in savings per unit change in income.
(B) Marginal propensity to save	(II) Savings per unit of income.
(C) Average propensity to consume	(III) Change in consumption per unit change in income.
(D) Average propensity to save	(IV) Consumption per unit of income.

Choose the correct answer from the options given below:

2023: 29 May Shift 2

Identify the symbol that is used to denote autonomous consumption.

2022: 15 July Shift 2

Which of the following is true about the aggregate demand curve in the short run;

Choose the correct option:

Solution

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