Match List - I with List - II.
List - I (Curves) List - II (Shape) (A) Aggregate demand curve (I) Upward sloping line with a positive intercept on y-axis (B) Aggregate supply curve (II) Parallel to x axis (C) Autonomous investment curve (III) 45 degree line passing through the origin (D) Consumption function (IV) Parallel to consumption function
Choose the correct answer from the options given below :
Match List - I with List - II.
| List - I (Curves) | List - II (Shape) | ||
|---|---|---|---|
| (A) | Aggregate demand curve | (I) | Upward sloping line with a positive intercept on y-axis |
| (B) | Aggregate supply curve | (II) | Parallel to x axis |
| (C) | Autonomous investment curve | (III) | 45 degree line passing through the origin |
| (D) | Consumption function | (IV) | Parallel to consumption function |
Choose the correct answer from the options given below :
Solution
✅ Correct Option: 4
Aggregate demand (AD = C + I) is parallel to consumption function since autonomous investment shifts it upward, so (A)-(IV).
Aggregate supply (AS) is a 45-degree line through the origin (AS = Y), so (B)-(III).
Autonomous investment is fixed regardless of income, so it is parallel to x-axis, (C)-(II).
Consumption function is upward sloping with a positive y-intercept (C = C-bar + bY), so (D)-(I).
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