Explain the working of investment multiplier with the help of an example.

In the given figure, what does the gap ‘KT’ represent? State any two fiscal measures to correct the situation.

In an economy, the ratio of Average Propensity to Consume and Average Propensity to Save is 5 : 3. The level of income is ₹ 6,000. How much are the savings? Calculate.

An economy is in equilibrium. Calculate the National Income from the following:

Explain the national income determination in an economy using saving and investment approach. Use diagram.

An economy is in equilibrium. Calculate the Investment Expenditure from the following:
National Income = 800
Marginal Propensity to Save = 0·3
Autonomous Consumption = 100

The saving curve of an economy makes a negative intercept of ₹ 20 crore and 10% of additional income is saved. Derive the saving and cunsumtions function.

An economy is in equilibrium. From the following data, calculate the marginal propensity to save:

1. Income = 10,000
2. Autonomous consumption = 500
3. Consumption expenditure = 8,000

The value of marginal propensity to consume is 0.6 and initial income in the economy is ₹ 100 crores. Prepare a schedule showing Income, Consumption and Saving. Also show the equilibrium level of income by assuming autonomous investment of ₹ 80 crores.

What is meant by aggregate demand? State its components.