CUET Economics 2025 30 May Shift 2 PYQs

Suppose at the initial equilibrium of $Y^*$, there is an exogenous or autonomous shift in peoples' expenditure pattern – they suddenly become more thrifty.

What will be the sequential effect of the above on the economy?

(A) The sudden decline in MPC will imply a decrease in aggregate consumption spending and hence in aggregate demand.

(B) There emerges an excess supply in the economy, but that would mean a reduction in factor payments in the next round and hence a reduction in income.

(C) There is no change in the total value of savings.

(D) MPS of the economy increases, and hence MPC falls.

Choose the correct answer from the options given below:

Arrange the following in correct sequence according to their occurance.

(A) Reduction in cash reserve ratio by the Reserve Bank.

(B) Involuntary unemployment situation in the economy.

(C) Increase in credit availability in the capital market.

(D) Aggregate demand falls short of aggregate supply, corresponding to full employment in the economy.

Choose the correct answer from the options given below:

Given the equation of the consumption function as $C = \bar{C} + cY$, what does $\bar{C}$ donate?