Income (Y) | Consumption [C] | Marginal Propensity To Save (MPS) | Average Propensity to Consume (APC) |
0 | 15 | - | - |
50 | 50 | - | - |
100 | 85 | - | - |
150 | 120 | - | - |
Answer:
Or Difference between aggregate demand and aggregate supply are:
Income(Y)
Consumption[C]
Saving (s)\[(S=Y-C)\]
Change in Savings \[(\Delta S)\]
Change in Income\[(\Delta Y)\]
MPS\[\left( \frac{\Delta S}{\Delta Y} \right)\]
APC\[\left( \frac{C}{Y} \right)\]
0
15
0 - 15 =(15)
-
-
-
\[15/0=\infty \]
50
50
50 -15 = 0
0-(-15)=15
50 ? 0 = 50
15 /50=0.3
50 /50=1
100
85
100 - 85 =15
15 - 0= 15
100 ? 50 =50
15 /50=0.3
85 /100=0.85
150
120
150-120 =30
30 - 15=15
150 -100 =50
15 /50=0.3
120/150=0.80
Basis
Aggregate Demand
Aggregate Supply
Meaning
Aggregate Demand(AD) refers to the total value of final goods and services that all sectors of the economy taken together are planning to ?buy? at a given level of income during a period of time.
Aggregate Supply (AS) means the value of final goods and service planned to be ?Produced? by all the production units in the economy taken together during a period of time.
Components
Components of AD are private consumption expenditure, private investment expenditure, government expenditure and net exports.
Components of AS are consumption expenditure and savings
Origin of the curve
AD curve originates from AD curve originates from Y-axis.
As curve originates from origin.
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