An autonomous increase in expenditure should result in an increase in a country’s real GNP only if ?
Q. An autonomous increase in expenditure should result in an increase in a country’s real GNP only if ?
Answer: The country’s economy is working under conditions of less than full employment
Notes: When the economy is working under conditions of less than full employment, the GDP gap is positive and the economy operates at less than potential. At this point, an increase in expenditure would result in an increase in a country’s real GNP.

 

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