ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -False. While investment is autonomous, increase in income is induced through increase in expenditure.

Detailed explanation-2: -Some of the factors that determine an individual’s income level include education level, economic trends, and skills. The level of education has a significant impact on your future income and can expand your access to prospects within a chosen sector based on your educational level.

Detailed explanation-3: -An increase in income results in an increase in the demand for goods and services while a decrease in income results in a decrease in demand; though not always. The marginal propensity to spend and the marginal propensity to save are looked at when determining the influences of the income effect.

Detailed explanation-4: -Most simply, the formula for the equilibrium level of income is when aggregate supply (AS) is equal to aggregate demand (AD), where AS = AD. Adding a little complexity, the formula becomes Y = C + I + G, where Y is aggregate income, C is consumption, I is investment expenditure, and G is government expenditure.