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Economics miscellaneous

  1. Effective demand depends on
    1. capital-output ratio
    2. output-capital ratio
    3. total expenditure
    4. supply price
Correct Option: D

Effective Demand is "the demand in which the consumer are able and willing to purchase at conceivable price" simply saying if the product price is low more will buy; but if the rates go high then the quantity of the demand goes down. Keynes used two terms: Aggregate Demand Function or Price and Aggregate Supply Function or Price to explain the determination of effective demand.



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