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Why GDP equals aggregate expenditure and aggregate income?
GDP would be the amount of gross income a person or company receives. This would be the amount of income minus the amount of expenditure on things like bills.
What is Simple theory of Income Determination?
Total income depends on total employment which depends on effective demand which in turn depends on consumption expenditure and investment expenditure. Consumption depends on income and propensity to consume. Investment depends upon the marginal efficiency of capital and the rate of interest. J. M. Keynes made it clear that the level of employment depends on aggregate demand and aggregate supply. The equilibrium level of income or output depends on the relationship between the aggregate demand curve and aggregate supply curve. As Keynes was interested in the immediate problems of the short run, he ignored the aggregate supply function and focused on aggregate demand. And he attributed unemployment to deficiency in aggregate demand.
What do you mean by income over expenditure or expenditure over income?
income over expenditure is profitexpenditure over income is loss
What is the concept of Multiplier?
The concept of Multiplier highlights the effects of initial investment upon national income through changes in consumption expenditure.
Is it true for an economy as a whole. income equals expenditure because the income of the seller must be equal to the expenditure of the buyer?
Yes
Why GDP equals aggregate expenditure and aggregate income?
GDP would be the amount of gross income a person or company receives. This would be the amount of income minus the amount of expenditure on things like bills.
Why aggregate income is equal to aggregate expenditure?
One man's income is another man's expenditure. The expenditure of buyers on products is, by the rule of accounting, income to the sellers of those products. Every transaction that affects income must affect expenditure. If, for example, a company produces and sells one extra loaf of bread. This transaction will raise total expenditure on bread, but it also has an equal effect on income. If the company produces the extra loaf without hiring any more labour (such as making the production process more efficient), then profit increases. If the company produces the loaf by hiring more labour, then wages increase. In both cases, expenditure and income increase equally.
What is the aggregate expenditure function in terms of income?
the function that represents total spending in an economy at a given level of real disposable income.
A decrease in net taxes will?
Raise aggregate expenditure by raising disposable income, thereby increasing consumption.
What is Simple theory of Income Determination?
Total income depends on total employment which depends on effective demand which in turn depends on consumption expenditure and investment expenditure. Consumption depends on income and propensity to consume. Investment depends upon the marginal efficiency of capital and the rate of interest. J. M. Keynes made it clear that the level of employment depends on aggregate demand and aggregate supply. The equilibrium level of income or output depends on the relationship between the aggregate demand curve and aggregate supply curve. As Keynes was interested in the immediate problems of the short run, he ignored the aggregate supply function and focused on aggregate demand. And he attributed unemployment to deficiency in aggregate demand.
Is credit income or expenditure?
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
What do you mean by income over expenditure or expenditure over income?
income over expenditure is profitexpenditure over income is loss
What has the author R Gausden written?
R. Gausden has written: 'The importance of income volatility in forecasting aggregate consumers' expenditure in the U.K' 'Real wages and employment'
Explain the subsititution and income effect of decrease in price?
substitution effect is the explanation for the downward slope of the aggregate damnd curve.
What is the difference between income and expenditure incurred?
Inflow of money is income . Outflow of money is expenditure
What is between revenue and expenditure?
revenue is income and expenditure is an expense
What is income expenditure?
A statement that records the income and expenditure of an organization such as a charity,whose main purpose is not the generation of profit.
