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Determination of Income and Employment
Question
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How is value of ex-ante AD derived under fixed price and constant rate of interest?

Answer

In an economy without government, ex-ante, AD is the sum total of ex-ante consumption expenditure and ex-ante investement expenditure.

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Some More Questions From Determination of Income and Employment Chapter

State relationship between income and consumption.

What is Breakeven point?

What are the types of Propensity to consume?

How does MPC affect level of income?

Distinguish between APC and MPC, The value of which of APC and MPC can be greater than one and when?