Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Determination of Income and Employment

Question:

Why does the government decide to make an autonomous investment during depression?

Options:

Gives boost to the economic system by breaking the vicious circle of low demand etc.

Government has extra in pocket during depression to spend on

To increase the social-welfare and overall development of the country

Both 1 and 3

Correct Answer:

Both 1 and 3

Explanation:

Autonomous investment is done by the government for social welfare or overall development of the individual. In a situation like depression, the government makes autonomous investment which is expected to give a boost in the economic system by breaking the vicious circle of low demand, low investment and low level of income and employment.