4 - Determination of Income and Employment
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Practice Questions
Test your understanding with targeted questions
Define 'Aggregate Demand'.
💡 Hint: Think about what consumers and businesses require in an economy.
What does MPC stand for?
💡 Hint: What does propensity mean in general usage?
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is Aggregate Demand?
💡 Hint: Think about what drives the economic engine.
True or False: The Paradox of Thrift suggests that saving more will always increase overall savings.
💡 Hint: Consider the implications of consumer behavior.
1 more question available
Challenge Problems
Push your limits with advanced challenges
Given an economy where consumption function is C = 50 + 0.7Y and investment I = 30, calculate the equilibrium level of income.
💡 Hint: Set aggregate demand to equal aggregate supply and solve for Y.
If savings increase by 20, and the MPC drops to 0.5, analyze the long-term effects on national income using the concept of the Paradox of Thrift.
💡 Hint: Consider cycles of spending and saving in your analysis.
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