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CBSE 12th Economics Exam Prep
·
Module 4
Income and Employment: Core Theory
1
Aggregate Demand: Two-Sector Model (C+I)
Explain Aggregate Demand (AD) and its components (C+I) in a two-sector model.
2
Propensities to Consume and Save
Define and calculate Average and Marginal Propensities to Consume and Save (APC, APS, MPC, MPS).
3
Deriving Consumption and Saving Functions
Derive the consumption function (C = CÌ„ + bY) and the saving function (S = -CÌ„ + (1-b)Y).
4
Determining Equilibrium Income with AD-AS
Explain the determination of equilibrium income/output using the Aggregate Demand-Aggregate Supply (AD-AS) approach.
5
Equilibrium Income: The S-I Approach
Explain the determination of equilibrium income/output using the Saving-Investment (S-I) approach.
6
The Investment Multiplier: Mechanism and Formula
Explain the investment multiplier mechanism and derive its formula (K = 1/(1-MPC)).
7
Understanding Inflationary and Deflationary Gaps
Explain the concepts of inflationary gap (excess demand) and deflationary gap (deficient demand).
Previous module
Money and Banking
Next module
Income and Employment: Numericals and Policy