Class XII
Assignment
Economics
AGGREGATE DEMAND and RELATED CONCEPTS
1. What is aggregate demand?
2. What is aggregate supply?
3. What determines the level of household consumption demand in an economy?
4. What is investment?
5. What are the components of demand for private investment?
6. What is consumption function?
7. What is saving function?
8. What is meant by average propensity to consume?
9. What happens to household consumption expenditure with increase in disposable income?
10. Define average propensity to save.
11. Give the meaning of marginal propensity to consume.
12. Give the meaning of autonomous consumption.
13. What is the value of MPC when MPS is zero?
14. What can be the maximum value of marginal propensity to save?
15. Why the value of marginal propensity to consume not greater than one?
16. Give the meaning of ex-ante saving.
17. If in an economy investment is greater than saving, what is the effect on the national income?
18. What is meant by ex-ante investment?
19. What is ex-post measure?
20. Saving and investment are always equal. Discuss.
-------- Saving and investment can be realized (ex-post) or planned (ex-ante). Planned S and
planned investment are equal only at equilibrium level. Realised saving and only realized
investment are always equal.
Y = C + S or Y = C + I
 C+S = C+ I or S = I