1.

Define:- a) Psychological law of consumption b) Ex-ante Investment c) Ex-post investment. d) Involuntary unemployment e) Full employment 

Answer»

a) Psychological law of consumption: It state that as income in an economy increases consumption also increases but less than increase in income. 

b) Ex-ante Investment:- Ex-ante Investment refers to the planned or intended investment during a particular period of time. It is planned on the basis of future expectations. So it is imaginary (intended), in which a firm assumes the level of investment on its own. 

c) Ex-post Investment:- Ex-post Investment refers to the actual level of investment during a particular period of time. It signifies the existing investment of a particular time.

d) Involuntary Unemployment refers to a situation in which people are ready to work at prevailing wage rate, but do not find work. e) Full Employment refers to a situation in which all the persons in the economy those who wish to work at prevailing wage rate, are getting the work. It means there is no involuntary unemployment



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