Revision Notes For Class 12 Economics Macroeconomics Chapter 4 Determination Of Income And Employment

Determination Of Income And Employment is one of the most important chapters for the class 12 students. This chapter comprises of various concepts – Aggregate demand (AD), aggregate supply (AS), consumption function, average propensity to consume, marginal propensity to consume, linear consumption function, saving function, average propensity to save, marginal propensity to save, equilibrium level of output, effective demand, full employment equilibrium, paradox of thrift. These are a few important points that the students can learn and revise.

Frequently asked Questions on CBSE Class 12 Microeconomics Notes Chapter 4: Determination of Income and Employment

What is ‘linear consumption function’?

Linear Consumption Function If the consumption function is given on the assumption of constant marginal propensity to consume.

What is ‘Aggregate demand’?

Aggregate demand is a measurement of the total amount of demand for all finished goods and services produced in an economy.

What is ‘paradox of thrift’?

The paradox of thrift is an economic theory that argues that personal savings can be detrimental to overall economic growth.

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