What will be the effect on Aggregate Demand when MPC decreases ? Option 1: Aggregate Demand Decreases Option 2: Aggregate Demand Increases Option 3: It remains Constant Option 4: It neither decreases nor increases

The answer is 'Aggregate Demand Decreases'. View full solution:

CUET Economics - What will be the effect on Aggregate Demand when MPC decreases ? | PYQs + Solutions

CUET Economics

Macro

Easy

Aggregate Demand Decreases

Aggregate Demand Increases

It remains Constant

It neither decreases nor increases

✅ Correct Option: 1

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:

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When autonomous investment increases, the aggregate demand curve shifts?

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Which of the following statement is true?

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