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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 format for capital expenditure budget?
The format for capital expenditure budget is to list all the expenditure with their estimates. The cost of capital assets and expenditure must be provided.
Aggregate demand and Aggregate supply curve?
The aggregate demand curve show what consumers are willing to buy at a given price level, whereas the aggregate supply curve shows what producers are willing to produce at a given price level.
What will happen to the equilibrium price level and the real GDP if the aggregate demand increases and aggregate supply decreases?
The equilibrium price level increases, but the real GDP change depends on how much aggregate demand and aggregate supply change by.
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model?
The quantity of full employment in the aggregate supply aggregate demand model is similar to the conditions in which other model. (Market Supply and Demand.)
What is the relationship between aggregate expenditure and real GDP?
There is a direct proportional relationship between aggregate expenditure and real GDP. Aggregate expenditure is actually equal to real GDP. This is different from the planned expenditure.
On the aggregate expenditure graph if autonomous investment decreased by 10 billion what happens to the aggregate expenditure line and planned savings?
autonomous onvestment cant be decreased
How does the leakages and injections in the aggregate expenditure model influence the level of GDP of an economy?
How does the leakages and injections in the aggregate expenditure model influence the level of GDP of an economy?
What is an aggregate expenditure?
expenditure money paid out; an amount spent expenditure the act of spending money for goods or services expenditure the act of consuming something
How do you calculate aggregate expenditure?
AE=C+I+G+(X-M)
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 kind of fiscal policy you advocate in case of aggregate expenditure exceeds aggregate output?
american iventiveness and tenoloical progress florished
What is difference between Autonomous Expenditure and Induced Expenditure?
AUTONOMOUS AND INDUCEDEXPENDITURE :Autonomous expenditure is independent ofchanges in real GDP, whereas induced expenditurevaries as real GDP changes. In general, a change inautonomous expenditure creates a change in realGDP, which in turn creates a change in inducedexpenditure. The induced changes are at the heartof the multiplier effect.Induced expenditure is the sum of the componentsof aggregate expenditure that change withGDP.♦ Autonomous expenditure is the sum of the componentsof aggregate expenditure that do notchange when real GDP changes.
What happens when aggregate planned expenditure exceeds real GDP?
If aggregate planned expenditure exceed real GDP, firms sell more than they planned to sell and end up with inventories being too low. vice versa if aggregate planned expenditure is less than real GDP, firms sell lessthan they planned to sell and end up with unplanned inventories.
What are the factor affecting aggregate Demand?
Consumption, Investment, Government Expenditure and Net Exports
Meaning of development and non development expenditure?
developmental expenditure in the country increases the purchasing power,aggregate deman and prices,resulying in increased imports
What is IS LM model?
It is a diagrammatic representation of a model of aggregate demand determination based upon the locus ofequilibrium points in the aggregate expenditure sector (IS) and the monetary sector(LM).
