Aggregate Demand & Related Concepts



Watch the Demo

Download our app to watch full video!


Download App

Contents

Consumption Function


Description: The consumption function represents the relationship between income and consumption, indicating the propensity to consume, or the fraction of income spent on goods and services.


APC vs. MPC: A Comparison


Description: APC (Average Propensity to Consume) compares total consumption to income, while MPC (Marginal Propensity to Consume) measures the change in consumption due to income changes incrementally.


Aggregate Demand in a Two-Sector Model


Description: In a two-sector model, aggregate demand (AD) is the sum of consumption (C) and investment (I), representing total spending by households and businesses.


MPS. Schedule and Diagram


Description: The MPS (Marginal Propensity to Save) schedule and diagram illustrate the relationship between income changes and savings, showing how savings increase with income.


Aggregate demand & Components


Description: Aggregate demand is the total demand for goods and services in an economy, comprising consumption, investment, government spending, and net exports (exports minus imports).


Investment Function: Economic Impact


Description: The investment function analyzes how changes in interest rates and business expectations affect planned investment spending, influencing economic growth and employment levels.


Related Courses

Basic Concepts in Economics

Board: State Board

Stream: Commerce

Standard: XI

Course: Economics

Know More

Partition Values

Board: State Board

Stream: Commerce

Standard: XI

Course: Economics

Know More

Money

Board: State Board

Stream: Science

Standard: XI

Course: Economics

Know More