To find the correct statement among the options provided, let's analyze each one step by step:

(a) AD curve has a positive slope: The AD curve, also known as the Aggregate Demand curve, represents the relationship between the overall level of spending in an economy and the corresponding price level. The slope of the AD curve depends on various factors, such as the interest rate, government policies, and consumer and business confidence. Therefore, it is not accurate to say that the AD curve always has a positive slope. This statement is incorrect.

(b) AD curve originates from the point of origin and has a positive slope: The AD curve does not necessarily originate from the point of origin (0,0) on a graph. Its starting point depends on the level of autonomous spending in the economy. Additionally, as mentioned before, the slope of the AD curve can be positive, negative, or even flat, depending on the economic conditions. Therefore, this statement is also incorrect.

(c) According to Keynes, investment increases with an increase in income: This statement is correct. According to the economic theory proposed by John Maynard Keynes, an increase in income leads to an increase in consumption and investment. Keynes argued that when individuals and businesses have more disposable income, they are more likely to spend and invest, which stimulates economic growth.

(d) Consumption is zero at the zero level of income: This statement is incorrect. Consumption can still occur even at the zero level of income. Individuals may have savings or access to credit, which allows them to consume even when their income is zero. Additionally, there may be government assistance programs or social safety nets that provide support to individuals with no income. Therefore, this statement is not accurate.

In conclusion, the correct statement among the options provided is (c) According to Keynes, investment increases with an increase in income.

Question

To find the correct statement among the options provided, let's analyze each one step by step:

(a) AD curve has a positive slope: The AD curve, also known as the Aggregate Demand curve, represents the relationship between the overall level of spending in an economy and the corresponding price level. The slope of the AD curve depends on various factors, such as the interest rate, government policies, and consumer and business confidence. Therefore, it is not accurate to say that the AD curve always has a positive slope. This statement is incorrect.

(b) AD curve originates from the point of origin and has a positive slope: The AD curve does not necessarily originate from the point of origin (0,0) on a graph. Its starting point depends on the level of autonomous spending in the economy. Additionally, as mentioned before, the slope of the AD curve can be positive, negative, or even flat, depending on the economic conditions. Therefore, this statement is also incorrect.

(c) According to Keynes, investment increases with an increase in income: This statement is correct. According to the economic theory proposed by John Maynard Keynes, an increase in income leads to an increase in consumption and investment. Keynes argued that when individuals and businesses have more disposable income, they are more likely to spend and invest, which stimulates economic growth.

(d) Consumption is zero at the zero level of income: This statement is incorrect. Consumption can still occur even at the zero level of income. Individuals may have savings or access to credit, which allows them to consume even when their income is zero. Additionally, there may be government assistance programs or social safety nets that provide support to individuals with no income. Therefore, this statement is not accurate.

In conclusion, the correct statement among the options provided is (c) According to Keynes, investment increases with an increase in income.

Knowee AI · Accepted Answer

To find the correct statement among the options provided, let's analyze each one step by step:

(a) AD curve has a positive slope: The AD curve, also known as the Aggregate Demand curve, represents the relationship between the overall level of spending in an economy and the corresponding price level. The slope of the AD curve depends on various factors, such as the interest rate, government policies, and consumer and business confidence. Therefore, it is not accurate to say that the AD curve always has a positive slope. This statement is incorrect.

(b) AD curve originates from the point of origin and has a positive slope: The AD curve does not necessarily originate from the point of origin (0,0) on a graph. Its starting point depends on the level of autonomous spending in the economy. Additionally, as mentioned before, the slope of the AD curve can be positive, negative, or even flat, depending on the economic conditions. Therefore, this statement is also incorrect.

(c) According to Keynes, investment increases with an increase in income: This statement is correct. According to the economic theory proposed by John Maynard Keynes, an increase in income leads to an increase in consumption and investment. Keynes argued that when individuals and businesses have more disposable income, they are more likely to spend and invest, which stimulates economic growth.

(d) Consumption is zero at the zero level of income: This statement is incorrect. Consumption can still occur even at the zero level of income. Individuals may have savings or access to credit, which allows them to consume even when their income is zero. Additionally, there may be government assistance programs or social safety nets that provide support to individuals with no income. Therefore, this statement is not accurate.

In conclusion, the correct statement among the options provided is (c) According to Keynes, investment increases with an increase in income.

Find the correct statement:(a). AD curve has a positive slope(b). AD curve originates from point of origin and has a positive slope.(C). According to Keynes, investment increases with increase in income.(d). Consumption is zero at zero level of income..

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