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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.
Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.
  • a)
    Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
  • b)
    Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
  • c)
    Assertion (A) is true, but Reason (R) is false.
  • d)
    Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A...
Aggregate Demand refers to the value of final goods and services which all sectors of an economy are planning to buy during a year.
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Directions : In the following questions, a statement of Assertion (A...
Aggregate Demand and its components

Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.
Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.

Explanation:

Aggregate Demand refers to the total demand for goods and services in an economy at a particular time period. It is calculated by adding up the expenditures made by households, businesses, government, and foreign buyers for final goods and services produced within the country during a given period of time. Hence, the Assertion (A) is true.

Aggregate Demand (AD) is composed of four components:
• Consumption expenditure (C): This refers to the expenditure made by households on goods and services.
• Investment expenditure (I): This refers to the expenditure made by firms on capital goods, such as machinery, equipment, and buildings.
• Government expenditure (G): This refers to the expenditure made by the government on goods and services, such as defense, education, and healthcare.
• Net exports (NX): This refers to the difference between exports and imports. If exports are greater than imports, then it is a positive net export, and if imports are greater than exports, then it is a negative net export.

Hence, the Reason (R) is also true.

Conclusion:

Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). Option (A) is the correct 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

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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.What happens when the Investment is lesser than Savings?

Read the following report and answer the questions that follow:Due to the Covid-19 situation, there has been a fall in the savings of the people, and they are spending the savings. This has led to the consumption to be done by the reduction of the savings. In order to control the situation, the government has announced various stimulus packages to revive the economy and providing employment through road and railway building projects. Still the desired savings or ex-ante savings that is required for the functioning of the economy has reduced. It is seen that the private consumption expenditure, private investment expenditure and ex-ante savings has reduced the aggregate demand in the economy.It is seen that the private consumption expenditure, private investment expenditure and ex-ante savings has reduced the ________________ in the economy.

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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. 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 Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): Aggregate Demand is expressed in terms of total expenditure made in the economy.Reason (R): Aggregate Demand constitutes of Consumption Expenditure, Investment Expenditure, Government Expenditure and Net Exports.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false.d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'A'. Can you explain this answer?.
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