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.
Income is money coming in, expenditure is money going out (spending).
This is the difference between Income and Expenditure in a non-profit making business, where the income exceeds expenditure
The basic principle is this. Income exceeds expenditure = PROFIT Expenditure exceeds income = LOSS No profit or loss = BREAK-EVEN
It's the amount consumers are willing to pay, fluctuating with matters such as interest rates and consumer confidence
Yes and No. If the method of accounting followed is Mercantile, Yes. If the method of accounting followed is Cash System, No. In Mercantile method of Accounting, Negetive Income represents the excess of expenditure over income. In this method; Income and Expenditure considered are on accrual basis, i.e., income or expenditure is taken as such in the books of account; the moment a right to receive income or a liability to pay for expenditure has crytallised. The movement fo cash into the business or out of business is not the criteria. Therefore, inspite of a negative income in a particular year, a business may have a positive Cash flow on account of excess of cash flow arising out of previous years income, which is held as an asset in the form of Sundry Debtors, over the payments made in respect of previous years expenditure which is held as a liability in the form of Sundry Creditors on the balance sheet.
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.
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.
the function that represents total spending in an economy at a given level of real disposable income.
Raise aggregate expenditure by raising disposable income, thereby increasing consumption.
Yes
An economy's income must equal it's expenditure to keep its budget in balance. If the income is less, it results in debt which eventually has to be paid back.
In the short run, equilibrium GDP is the level of output at which output and aggregate expenditure are equal
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.
Actually it is the change in the equilibrium expenditure divided by the change in autonomous expenditure. That will equal the expenditure multiplier.
For an economy as a whole, income must equal expenditure because:u Every transaction has a buyer and a seller.u Every dollar of spending by some buyer is a dollar of income for some seller.
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
income over expenditure is profitexpenditure over income is loss