Question : Decrease in ____________, will increase the aggregate demand in the economy.
 

Option 1: Taxation
 

Option 2: Government spending
 

Option 3: Both A and B
 

Option 4: Neither A nor B
 

Question : According to this approach, the equilibrium level of income in an economy is determined where aggregate demand is equal to aggregate supply.
 

Option 1: Aggregate demand and aggregate supply approach
 

Option 2: Savings and investment approach
 

Option 3: Both A and B
 

Option 4: Neither A nor B.
 

Question : Statement 1: An increase in government spending will lead to a rightward shift in the aggregate demand curve.

Statement 2: An increase in aggregate supply will lead to a decrease in the price level.

Which statement is correct?

Option 1: Only Statement 1
 

Option 2: Only Statement 2
 

Option 3: Both Statement 1 and Statement 2

Option 4: Neither Statement 1 nor Statement 2

Question : Demand-pull inflation occurs when:

Option 1: Aggregate demand exceeds aggregate supply
 

Option 2: Aggregate supply exceeds aggregate demand
 

Option 3: There is a decrease in aggregate demand

Option 4: There is a decrease in the aggregate supply

Question : Statement 1: An increase in government spending will lead to a shift in aggregate demand.

Statement 2: An increase in wages will lead to a shift in aggregate supply.

Which statement is correct?

Option 1: Only Statement 1
    

Option 2: Only Statement 2
   

Option 3: Both Statement 1 and Statement 2

Option 4: Neither Statement 1 nor Statement 2