Practice Key Concepts (2.2) - Chapter 2: Theory of Income and Employment
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Key Concepts

Practice - Key Concepts

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Practice Questions

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Question 1 Easy

What is Aggregate Demand and its components?

💡 Hint: Think of C, I, G, and X.

Question 2 Easy

Define underemployment.

💡 Hint: Consider jobs below one's skill level.

4 more questions available

Interactive Quizzes

Quick quizzes to reinforce your learning

Question 1

What is the formula for Aggregate Demand?

AD = C + I + G + (X - M)
AD = C - I + G + X
AD = I + G + Exports

💡 Hint: Recall the elements that comprise Aggregate Demand.

Question 2

Is it true that structural unemployment occurs when there's a mismatch between the skills of workers and available jobs?

True
False

💡 Hint: Think about what happens when skills do not align with job demands.

1 more question available

Challenge Problems

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Challenge 1 Hard

Analyze a situation where government expenditure increases significantly. How would this affect Aggregate Demand and the economy's equilibrium?

💡 Hint: Consider how increased public spending impacts overall consumption and investment.

Challenge 2 Hard

Consider a scenario where a country faces high structural unemployment. What policies could be recommended based on Keynesian economics to address this issue?

💡 Hint: Think about how education can align skills with job market needs.

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