Equilibrium Output, Multiplier and Problems of Demand

Economics · Chapter 12 · 2. Theory of Income and Employment

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Your path through this chapter

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Visual lesson Beta
1. Part 1: Equilibrium and the Multiplier18 slides
2. Part 2: Full Employment and Problems of Demand16 slides
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Notes Beta
6 sections with key terms, formulas and exam tips.
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Flashcards Beta
30 cards for quick recall of key terms and facts.
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Practice
78 board-style questions with instant checks: Multiple choice 25, Short answer 21, Long answer 7, Assertion and reason 6.
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Chapter test Free
Short and long chapter tests in board pattern, with results and analysis.
- Chapter test (long) — Equilibrium Output, Multiplier and Problems of Demand · 40 marks · 100 min
- Chapter test (short) — Equilibrium Output, Multiplier and Problems of Demand · 20 marks · 50 min
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Equilibrium level of output: AD = AS approach and saving = investment approach
Investment multiplier: meaning, k = 1/(1 - MPC) = 1/MPS, and its working mechanism
Full employment and involuntary unemployment
Excess demand (inflationary gap) and deficient demand (deflationary gap): causes and effects
Measures to correct excess and deficient demand (fiscal and monetary)