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CBSE Notes Class 12 Economics Income Determination

by aglasem
March 14, 2023
in 12th Class
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Class 12 Economics: Macroeconomics – Income Determination – Get here the Notes for Class 12 Economics : Macroeconomics – Income Determination. Candidates who are ambitious to qualify the Class 12 with good score can check this article for Notes. This is possible only when you have the best CBSE Class 12 Economics Notes,study material, and a smart preparation plan. CBSE 2019 Class 12th Exam is approaching and candidates will have to make the best use of the time available towards the last stage of your CBSE Class 12th Economics Preparation. To help you with that, below we have provided the Notes of 12 Economics for topic Macroeconomics – Income Determination.

  • Class: 12th
  • Subject: Economics
  • Topic: Macroeconomics – Income Determination
  • Resource: Notes

CBSE Notes Class 12 Economics Income Determination

Candidates who are pursuing in Class 12 are advised to revise the notes from this post. With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. So, go ahead and check the Important Notes for Class 12 Economics : Macroeconomics – Income Determination.

Income Determination

1. Aggregate Demand (AD) It refers to the total demand for final goods and services in an economy during a year.
(i) Components ofAggregate Demand
(a) Private consumption demand (C)
(b) Private investment demand (T)
(c)Demand for goods and services by the government or government purchases (G)
(d) Demand for net exports (X·M)
Thus, AD = C + I + G + NE

2. Aggregate Supply (AS) It refers to the total quantity of goods and services produced by all the producers in an economy during a year.
(i) Components ofAggregate Supply
(a) Consumption (C)
(b) Saving (S)
Thus, AS=C+S

3. Consumption Function It means a functional relationship between total consumption and total disposable income.
Thus, C = f (y)
C = Consumption
y= Income

4. Average Propensity to Consume APC = C/Y
C = Total consumption
Y = Total income

5. Marginal Propensity to Consume (MPC)
MPC =Δc/Δy

Here, Δc = Change in consumption
Δy = Change in income

6. Linear Consumption Function If the consumption function is given on the assumption of constant marginal propensity to consume. It is called linear consumption function.
c=‾c+BY; ‾c.0,0,b,1
Here, c = Consumption ,‾c = Auto nomous consumption,B = Marginal propensity to consume, Y = Level of income

7. Saving Function Saving function is a schedule showing a functional relationship between total saving and tot.al income.
Thus, S = F (Y)
Here, S = Total saving ,Y = Total income

8. Average Propensity to Save

APS=S/Y
Here, S = Total saving ,Y = Total income

9. Marginal Propensity to Save  MPS = ΔS/ΔY

Here, ΔS = Change in saving, ΔY = Change in income

10. Equilibrium Level of Output Equilibrium level of output in an economy is determined at a point where planned spending (C+l) equals the planned output or where C+I curve intersects the 45° line.

11. Effective Demand It is that level of aggregate demand which becomes effective in determining equilibrium level of income because it is equal to aggregate supply.

12. Autonomous Consumption It refers to minimum level of consumption even when income is zero, it is indicated by ‘A’ in the consumption function . C=A+B
13. Ex-ante Saving It is what the savers plan to save at different levels of income in the economy.

14. Ex-ante Investment Is what the investors plan or intend to invest at different levels of income in the economy.

15. Ex-post Saving and Investment They refer to realised saving and investment in the economy. Ex-post saving is always equal to ex-post investment.

16. Multiplter Additional investment (ΔI), generates additional income (ΔY), but income generated is many times more than the investment.
Multiplier is the ratio between increase in income (ΔY) and increase in investment (ΔI) .  Multiplier (K) = ΔY/ΔI

17. Full Employment Equilibrium It refers to that situation in the economy when AD = AS along with fuller utilisation of  labour force.

18. Under Employment Equilibrium It refers to that situation in the economy when AS = AD but without the fuller utilisation of labour force.

19. Parodox of Thrift Which states that as people become more thrift they end up saving less or same as before.

Class 12 Key Points, Important Questions & Practice Papers

Hope these notes helped you in your schools exam preparation. Candidates can also check out the Key Points, Important Questions & Practice Papers for various Subjects for Class 12 in both Hindi and English language form the link below.

Class 12 Physics कक्षा 12 व्यावसायिक अध्ययन
Class 12 Chemistryकक्षा 12 समाज शास्त्र
Class 12 Maths कक्षा 12 अर्थशास्त्र
Class 12 Biology कक्षा 12 भूगोल
Class 12 Business Studies
Class 12 Economics
Class 12 Sociology

Class 12 NCERT Solutions

Candidates who are studying in Class 12 can also check Class 12 NCERT Solutions from here. This will help the candidates to know the solutions for all subjects covered in Class 12th. Candidates can click on the subject wise link to get the same. Class 12 Chapter-wise, detailed solutions to the questions of the NCERT textbooks are provided with the objective of helping students compare their answers with the sample answers.

  • Hindi
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  • Maths
  • Business Studies

Class 12 Mock Test / Practice

Mock test are the practice test or you can say the blue print of the main exam. Before appearing in the main examination, candidates must try mock test as it helps the students learn from their mistakes. With the help of Class 12 Mock Test / Practice, candidates can also get an idea about the pattern and marking scheme of that examination. For the sake of the candidates we are providing Class 12 Mock Test / Practice links below.

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Class 12 Exemplar Questions

Exemplar Questions Class 12 is a very important resource for students preparing for the Examination. Here we have provided Exemplar Problems Solutions along with NCERT Exemplar Problems Class 12. Question from very important topics is covered by Exemplar Questions for Class 12.

Physicsगणित
Chemistryभौतिक विज्ञान
Mathsसायन विज्ञान
Biology
Class 12 Economics Notes Maths Notes Economics Notes Sociology Notes
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