Short Run Equilibrium Output Class 12 Notes

Short Run Equilibrium Output Class 12 Notes
Short Run Equilibrium Output Class 12 Notes

Download Short Run Equilibrium Output Class 12 Notes PDF, Question papers, MCQ PDF, NCERT Books and Syllabus free of cost in just minutes. We provide complete study material of Short Run Equilibrium Output Class 12 Notes PDF. In study material includes Short Run Equilibrium Output Class 12 Notes PDF, previous year question paper class 12, Mcq Pdf, NCERT books, Latest syllabus by CBSE 2021-2020.

You can download short Run Equilibrium Output Class 12 Notes Pdf from the below article.


Short Run Equilibrium Output Class 12 Notes PDF

CBSE Class 12 Macroeconomics chapter 6 short-run equilibrium output class 12 notes pdf are made by research of last ten years NCERT question paper. Further, they are all designed with the latest CBSE guidelines 2021-2022 and only important topics are covered because of high chances to appear in exams. NCERT Class 12 Macroeconomics Chapter 6 short-run equilibrium output class 12 notes are very useful for students because it is necessary to understand all important questions and answer them in an efficient manner.

By these sample papers, students will have no problem making revision notes before exams and they don’t have to waste for making CBSE revision notes. You guys can download macroeconomics notes class 12 in just minutes. These notes are well structured and prepared on based CBSE latest syllabus class 12 2021-2022. These NCERT macroeconomics notes Chapter 6 short-run equilibrium output class 12 notes pdf for class 12 is well defined and easy to understand concepts and includes some practical questions for practice purposes.

We provided CBSE notes in pdf format for Students and they can use sample papers for preparing for the CBSE board exam 2021-2022. CBSE Class 12 macroeconomics Chapter 6 short-run equilibrium output class 12 notes pdf is very important for exam perspectives because it is a practical question chapter, not a theory-based chapter. And for exam perspective this important chapter because it has higher marks weightage in macroeconomics.

With the help of CBSE revision notes students can revise for the exam. Class 12 macroeconomics Chapter 6 short-run equilibrium output class 12 notes pdf is the best finest notes because these are prepared by very experienced teachers. Class 12 macroeconomics Chapter 6 short-run equilibrium output class 12 notes pdf are made in very easy language which helps the students understand easily.

So let’s talk about these notes in detail: first, we prepared three versions of the notes. In the first version of notes, we explain all topics with help of a colours diagram because in humans emotions and visual information are processed at the same time in the human brain. so, images and diagrams help to learn easily. Second, We prepared short revision notes which help you to revise before the CBSE board exam.

Macroeconomics short notes are 2 to 5 pages long which is not that lengthy. Each topic is explained very well with a short and accurate definition or concept. Third, In the third version of notes is very lengthy because each topic is explained in detail with help of examples if needed. We cannot say these notes are for exam revision purposes because these are too long this is only for study purposes.

we recommend studying these notes 1 to 2 months before the exam. CBSE is an educational board in India and based on the NCERT syllabus for CBSE schools and others schools affiliated to the CBSE Board of India. Also, we are providing Study material Class 12 macroeconomics for students and they can rid of stress. Getuplearn provides chapter-wise macroeconomics revision notes and short keynotes for the CBSE board exam.

Keynotes are easy to understand and also free downloadable PDF format so students can practice it for their exams and get good marks in their board examinations. Getuplearn provides class 12 notes for subjects like Accounts, Economics, Hindi, Business Studies, English, Physical Education. You can download free study material in pdf format for all streams science, commerce, arts etc. Also, class 6 notes, class 7 notes, class 8 notes, class 9 notes, class 10 notes, class 11 notes, class 12 notes.


Short Run Equilibrium Output Class 12 Notes

Short-run is defined as a period of time during which ‘technology’ plays no role in the determination of output in the economy. It is assumed to remain constant. Output is determined exclusively by the level of employment in the economy. A higher level of employment leads to a higher level of output, and vice versa.

Concept of Equilibrium Output

Equilibrium output (also called equilibrium GDP or equilibrium income) refers to that level of output in the economy where:

AS [Aggregate Supply] = AD [Aggregate Demand]

Determination of Equilibrium Level of Income

According to the Keynesian Theory, the equilibrium condition is generally stated in terms of aggregate demand (AD) and aggregate supply (AS). An economy is in equilibrium when aggregate demand for goods and services is equal to aggregate supply during a period of time.

So, equilibrium is achieved when:

AD = AS

We know, AD is the sum total of Consumption (C) and Investment (I):

AD = C + I

Also, AS is the sum total of consumption (C) and saving (S):

AS = C + S

Substituting (2) and (3) in (1), we get:

C + S = C + I

Or, S = I

It means, according to Keynes, there are Two Approaches for determining the equilibrium level of income and employment in the economy.


Two Approaches for Determination of Equilibrium Level

The two approaches to determine the equilibrium level of income, output and employment in the economy are:

  1. Aggregate Demand-Aggregate Supply Approach (AD-AS Approach)
  2. Saving-Investment Approach (S-I Approach) It must be kept in mind that AD, AS, Saving and Investment are all planned or ex-ante variables.

Assumptions

  • The determination of equilibrium output is to be studied in the context of two- Sector model (households and firms). It means, it is assumed that there is no government and foreign sector.
  • It is assumed that investment expenditure is autonomous, i.e. investments are not influenced by level of income.
  • Price level is assumed to remain constant.
  • Equilibrium output is to be determined in context of short-run.

Aggregate Demand-Aggregate Supply Approach (AD-AS Approach)

According to the Keynesian theory, the equilibrium level of income in an economy is determined when aggregate demand, represented by C + I curve is equal to the total output (Aggregate Supply or AS). If there is any deviation from the equilibrium level of output, i.e. when planned spending (AD) is not equal to planned output (AS), then a process of readjustment will start in the economy and the output will tend to adjust up or down until AD and AS are equal again.

When AD > AS

When planned spending (AD) is more than planned output (AS), then the (C + I) curve lies above the 45° line. It means that consumers and firms together would be buying more goods than firms are willing to produce. As a result, the planned inventory would fall below the desired level.

To bring the inventory back to the desired level, firms would resort to increasing in employment and output until the economy is back at output level OY, where AD becomes equal to AS and there is no further tendency to change.


Leave a Reply