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Read the report given below and answer the questions that follow:
In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.
Aggregate Demand is not determined by which of the following:
  • a)
    Consumption Expenditure
  • b)
    Investment Expenditure
  • c)
    Net Exports
  • d)
    Government Policies
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Read the report given below and answer the questions that follow:In a...
AD=C+I+G+X-M
Where,
C=Household Consumption Expenditure
I=Private Investment Expenditure
G=Government Expenditure
X-M=Net Exports
View all questions of this test
Most Upvoted Answer
Read the report given below and answer the questions that follow:In a...
Explanation:
Aggregate Demand (AD) is the total demand for goods and services in an economy at a given price level and time period. It is determined by several factors including consumption expenditure, investment expenditure, and net exports.

- Consumption Expenditure: Consumption expenditure refers to the spending by households on goods and services. It is the largest component of aggregate demand and is influenced by factors such as disposable income, consumer confidence, and interest rates.

- Investment Expenditure: Investment expenditure refers to the spending by businesses on capital goods, such as machinery, equipment, and buildings. It is influenced by factors such as interest rates, business confidence, and expected future profitability.

- Net Exports: Net exports refer to the difference between a country's exports and imports. It represents the demand for a country's goods and services from the rest of the world. Net exports are influenced by factors such as exchange rates, global demand, and trade policies.

- Government Policies: While government policies can have an impact on aggregate demand indirectly through their influence on consumption, investment, and net exports, they do not directly determine aggregate demand. Government policies can affect aggregate demand through fiscal policy (such as changes in government spending or taxation) and monetary policy (such as changes in interest rates or money supply).

Therefore, the correct answer is option 'D' - Government Policies. Government policies can influence aggregate demand, but they do not directly determine it.

In summary, aggregate demand is determined by consumption expenditure, investment expenditure, and net exports, while government policies can indirectly influence aggregate demand through their impact on these factors.
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Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer?
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Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer?.
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When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. It is to be kept in mind that the economy needs to be in equilibrium condition. When savings is less than the investments the aggregate demand is more than the aggregate supply, and vice versa.Aggregate Demand is not determined by which of the following:a)Consumption Expenditureb)Investment Expenditurec)Net Exportsd)Government PoliciesCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Read the report given below and answer the questions that follow:In an economy the Aggregate Demand is determined by consumption, Government Expenditure and Net Exports in the economy. This is affected by the Savings and Investment in the economy. The Multiplier, that is investment multiplier, which is influenced by the ratio of total consumption and total income, regulates the flow of money in the economy influencing the Aggregate Demand and Supply. Any change in any of the factors leads to a big change in the economy’s equilibrium as a whole. 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