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In a two-sector… (Class 12 Economics SQP 2024-25, Q8)

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EconomicsCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Economics sample paper 2024-25: question 8

From the official CBSE sample question paper for 2024-25, section A, question 8, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q8 · 1 mark · MCQDetermination of Income and Employment

In a two-sector economy, Aggregate Demand can be determined by adding ______. (Choose the correct option to fill up the blank)

  1. (A)Autonomous Consumption, Induced Consumption and Induced Investment
  2. (B)Autonomous Consumption, Autonomous Investment and Induced Investment
  3. (C)Autonomous Consumption and Autonomous Investment
  4. (D)Autonomous Consumption, Induced Consumption and Autonomous Investment

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Is investment assumed to depend on income in the Keynesian model?

Hint 2

Consumption has two parts.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. In a two-sector economy AD = C + I, where C = c̄ + bY (autonomous plus induced consumption).

  2. Investment is taken as autonomous, so AD = autonomous consumption + induced consumption + autonomous investment. Option (D).

    1 mark

Answer: (D) Autonomous Consumption, Induced Consumption and Autonomous Investment

Where the marks are

  • AD = c̄ + bY + Ī (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Determination of Income and Employment, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.