Match List-I with List-II.
| List-I | List-II |
| (A) Ex-ante saving | (I) Planned output |
| (B) Multiplier | (II) $\frac{ΔY}{ΔI}$ |
| (C) Aggregate supply | (III) Direct relationship with investment multiplier |
| (D) Marginal Propensity to consume | (IV) Desired saving |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 2
The correct answer is option (2) : (A)-(IV), (B)-(II), (C)-(I), (D)-(III)
| List-I | List-II |
| (A) Ex-ante saving | (IV) Desired saving |
| (B) Multiplier | (II) $\frac{ΔY}{ΔI}$ |
| (C) Aggregate supply | (I) Planned output |
| (D) Marginal Propensity to consume | (III) Direct relationship with investment multiplier |
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A) Ex-ante saving: This term refers to the planned or desired level of saving by individuals or an economy, which is denoted by (IV) Desired saving.
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(B) Multiplier: The multiplier effect in economics is described by the formula (II) ΔY / ΔI, where ΔY is the change in national income and ΔI is the change in investment.
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(C) Aggregate supply: Aggregate supply in macroeconomics refers to the total output or production planned by firms in an economy, which matches with (I) Planned output.
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(D) Marginal Propensity to consume: This term describes the proportion of additional income that is spent on consumption, and it has a (III) Direct relationship with the investment multiplier.