ECONOMICS (CBSE/UGC NET)

ECONOMICS

AGGREGATE DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In an average capitalist economy, what percentage of AD does consumption account for?
A
50%
B
60%
C
70%
D
80%
Explanation: 

Detailed explanation-1: -The most important component of AD is consumer spending. This makes up around 60% of the AD figure. Therefore, factors effecting consumption such as interest rate changes can have a big impact on the overall AD value and therefore economic growth.

Detailed explanation-2: -United States Private Consumption accounted for 68.5 % of its Nominal GDP in Dec 2022, compared with a ratio of 68.1 % in the previous quarter. US Private Consumption contribution to Nominal GDP ratio is updated quarterly, available from Mar 1947 to Dec 2022, with an average share of 63.3 %.

Detailed explanation-3: -GDP by Expenditure Household consumption is the largest element of expenditure across the economy, accounting for 61% of the total in 2022.

Detailed explanation-4: -Households and NPISHs final consumption expenditure (% of GDP) in India was reported at 59.56% in 2021, according to the World Bank collection of development indicators, compiled from officially recognized sources.

There is 1 question to complete.