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Income Determination & the Multiplier · Question 2 of 58

The graph shows the AD line and the 45° line.

Question 2

EasyOriginal question

The graph shows the AD line and the 45° line. At point E, aggregate demand is

An aggregate demand line AD = C + I that starts at ₹100 crore on the vertical axis, and a dashed 45° line. They meet at E, where income and aggregate demand are both ₹400 crore.
Options for question 2

Show the answer and explanation
CorrectNot quiteAnswer B

Correct answer: B

Explanation

  1. E lies on both lines, so AD = output = ₹400 crore.

Concept
AD at equilibrium
Typical time
40 s
Your time
—
The rule this testsEquilibrium: AD equals output
Practise this chapter →

Ten questions from Income Determination & the Multiplier, at your own pace.

Practise this chapter →

Ten questions from Income Determination & the Multiplier, at your own pace.