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Sandeep Garg Macroeconomics Class 12 Solutions Chapter 7

Q: 3. What important points should be considered in the chapter - The Aggregated Demand and Related Concepts?

Important points about aggregate demand are as follows:1. AD = C + I, as mentioned earlier, AD is considered a function of use and investment only.2. Positive consumption, even if the level of income is zero: there is always some use even if the income is zero. Zero level of income is called autonomous consumption.3. Slope of Consumption Curve: Consumption Curve rises higher as consumption increases and revenue increases. However, the average increase in income is more than an increase in spending as after reaching a certain level, people start saving part of the income.4. Slope of autonomous investment curve: The investment curve is a straight line along the x-axis as it is assumed to be independent of the income level.5. The starting point of the d curve: AD curve starts from R as zero at the income level AD = C + I.6. Slope of AD curve: The AD curve is upwards which represents that the combined demand increases with increasing revenue.

Commerce

Sandeep Garg Macroeconomics Class 12 Solutions Chapter 7

Class 12 Macroeconomics Sandeep Garg Solutions Chapter 7 - Aggregated Demand and Related Concepts

In a nutshell, economics is a study of how humans decide in the face of limited resources. Most of the aspects of life are limited be it lifespan, money or natural resources. To manufacture a product, resources like labour, equipment, power and raw materials are needed. All resources are sacred, and allocation is imperative, Sandeep Garg Macroeconomics Class 12 solutions Chapter 7 explains these theories profoundly. Microeconomics is all about allocating these scarce resources, to make the market economy work freely and seamlessly. Sandeep Garg Macroeconomics Class 12 solutions Chapter 7 explains the economy's dynamics in detail and lucidly.

Sandeep Garg Class 12 Solutions Chapter 7- Aggregate Demand and Related Concepts

Why should One choose Sandeep Garg Macroeconomics Class 12 Solutions for Chapter 7 - Aggregate Demand and Related Concepts?

Sandeep Garg Macroeconomics Class 12 Solutions for Chapter 7 - Aggregate Demand and Related Concepts is a comprehensive approach to the entire chapter that will help the students to ascertain the meaning of all the basic concepts very well. The aggregate demand and related concepts are explained by the latest experts of economics from the new edition of Sandeep Garg Macroeconomics Class 12 textbook solutions. This provides a comprehensive insight to the students which helps them as a priceless benefit to them while finishing their homework or while studying for their examinations. There are endless concepts and topics to cover in economics but we here are providing concept related questions from Aggregate Demand and Related Concepts.

Economics is a major subject in the Commerce stream and students should learn all the concepts in detail to score better marks in the exam. Some of the following benefits of Sandeep Garg Macroeconomics Class 12 Solutions Chapter 7 - Aggregate Demand and Related Concepts are as follows:

1. The solutions are based entirely in accordance with the advanced board syllabus.

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3. It has all the detailed and precise answers for the lengthy questions and clear solutions.

4. It acts as a great means of preparation and revision for the students at the time of exams and routine study.

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Who discovered the Aggregate Demand Theory?

During the great depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging neoclassical economics that held that free markets would automatically provide full employment, as long as workers agreed with their wage conditions requirements. He pointed out that aggregate demand (total spending in the economy) determines the overall level of economic activity, and that absolute insufficiency of aggregate demand can lead to long periods of unemployment, and that labor costs and strong wages fall, meaning the economy will not fully return to work. So this aggregate demand was discovered by John Maynard Keynes.

Overview of Chapter 7

The author in chapter 7 gives aggregate demand and related concepts and solutions. Aggregate demand means the overall demand for finished goods and services in the market in a financial year. It is also the ex-ante consumption and investment in all sectors of the economy. Aggregate demand and related concepts Sandeep Garg solutions elucidate that aggregate demand is not measured in units of finished products or services in terms of Keynes. Still, the total money the buyers are willing to pay.

Aggregate supply is the total goods and services produced by all sectors of the economy. Four resources; land, labor, capital, and enterprise are required to deliver goods or services. Rent is the incentive to a landowner, wages, salaries to labor, interest to capital, and profit to the entrepreneur for their contribution to the production process. Chapter 7 macroeconomics class 12 also states aggregate supply is the total monetary value of the produced goods and supply. The entire production cost of goods and services is the essence of aggregate supply.

Illustration

Microeconomics' primary focus is the demand and supply of all goods and services produced by the economy. An aggregate demand curve represents the total quantity of goods and services required by the economy at a different price level. Sandeep Garg macroeconomics class 12 chapter 7 aggregate demand and related concepts are explained through graphs, where the x-axis represents the price level of all finished goods and services. The horizontal axis stands for the total goods and services consumed, measured in the level of real GDP. If the aggregate demand curve is sloping downward, it implies, there is an inverse relationship between the price level, and quantity demanded by real GDP. There are many reasons for the downward curve.

Sandeep Garg solution chapter 7 prepares the student.

Macroeconomics Sandeep Garg Solution Chapter 7 for Top Score

Class 12 macroeconomics Sandeep Garg solution chapter 7 explains the concept of aggregate demand and supply through various graphs. The theory and concepts are illustrated clearly, help the student prepare for the exam, and score better. The author, with other experts, clarifies how scarce resources are allocated judiciously among the competing ends. The student understands how microeconomics is imperative for a free enterprise economy.

Conclusion

Sandeep Goel chapter 7 macroeconomics class 12 explains why microeconomics is vital for the economy and highlights the factors which can make the market economy more efficient. Students can download the PDF version for preparation and revision.

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FAQs on Sandeep Garg Macroeconomics Class 12 Solutions Chapter 7

1. What is aggregate demand in Macroeconomics?

Aggregate demand is the total demand for goods and services in the economy, which all sectors of the economy plan to buy at a certain level of revenue over a period of time. Aggregate demand, in fact, represents the estimated cost of goods and services in the economy, over a period of time. Aggregate demand is a large economic term that represents the total amount of demand for goods and services at any given price level over a period of time. Aggregate demand includes all consumer goods, capital goods (industries and tools), exports, imports and government spending plans.

2. What are the components of aggregate demand in Macroeconomics?

The components of aggregate demand in Macroeconomics are as follows:

1. Expenditure for consumption expenditure (domestic) (C): refers to the total expense incurred by households in purchasing goods and services during the year of accounting.

2. Investment costs (I): mean the total cost incurred by all private companies in capital assets.

3. Government expenditure (G): refers to the amount of government expenditure on good consumer goods and capital assets to meet the same economic needs. It means that the government receives both expenditures (education, health, transportation, etc.) and investment costs (roads, infrastructure, etc.

4. Net Exports (X-M): The difference between exports and imports is called NET exports.

Net Exports = Exports – Imports

Aggregate Demand = C + I + G + (X-M)

3. What important points should be considered in the chapter - The Aggregated Demand and Related Concepts?

Important points about aggregate demand are as follows:

1. AD = C + I, as mentioned earlier, AD is considered a function of use and investment only.

2. Positive consumption, even if the level of income is zero: there is always some use even if the income is zero. Zero level of income is called autonomous consumption.

3. Slope of Consumption Curve: Consumption Curve rises higher as consumption increases and revenue increases. However, the average increase in income is more than an increase in spending as after reaching a certain level, people start saving part of the income.

4. Slope of autonomous investment curve: The investment curve is a straight line along the x-axis as it is assumed to be independent of the income level.

5. The starting point of the d curve: AD curve starts from R as zero at the income level AD = C + I.

6. Slope of AD curve: The AD curve is upwards which represents that the combined demand increases with increasing revenue.

4. What do you mean by Induced Investment in the chapter - The Aggregate Demand and Related Concepts?

The real investment may be induced. Induced investments are generally profits or income motivated. Features such as prices, wages and interest rate changes affecting investments. Demand is also a factor. When revenue rises, the need to spend again increases and to meet this, investment increases. In the final analysis, it was found investment is a function of income i.e., I = f (Y). It is income elastic. It increases or decreases with an increase or decrease in revenue.

5. What does private investment mean?

Autonomous investment is independent of the income level and thus, is income elastic. It is influenced by exogenous factors like innovations, inventions, growth of population and labour force, researches, social and legal institutions, weather changes, war, revolution, etc. But it is not influenced by the desired changes. Rather, it influences the need. Investment is economic and social whether made by the government or the private sector. Such investments include construction costs, dams, roads, canals, schools, hospitals, etc. As investment in these projects is often associated with public policy, private investment is considered a public investment.

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