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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.
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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 an economy's income must equal to it's expenditure?
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.
Why must an economy's income be equal to it's expenditure?
An economy's income must be equal to it's expenditure because every transaction has a buyer and a seller. It is also because every dollar of spending by some buyer is a dollar of income for some seller. Gross domestic product (GDP) measures an economy's total expenditure on newly produced goods and services and the total income earned from the production of these goods and services.
Why an economy's income must be equal to its output?
Because output generates income.
Is the value of the GDP calculated by the income approach equal to the value of GDP calculated by the expenditure method?
YES
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 an economy's income must equal to it's expenditure?
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.
Why must an economy's income be equal to it's expenditure?
An economy's income must be equal to it's expenditure because every transaction has a buyer and a seller. It is also because every dollar of spending by some buyer is a dollar of income for some seller. Gross domestic product (GDP) measures an economy's total expenditure on newly produced goods and services and the total income earned from the production of these goods and services.
According to the Multiplier Equation equilibrium income will be equal to the multiplier divided by autonomous expenditures?
Actually it is the change in the equilibrium expenditure divided by the change in autonomous expenditure. That will equal the expenditure multiplier.
Why does income equal to total expenditure and also equal to GDP?
Because GDP, which stands for Gross Domestic Product, is the dollar value of total US production (of goods and services) within a given quarter. To measure how much we've produced, we keep track of how much has been bought in the economy. Another way to say this is that we keep track of how much each sector spends. Remember that GDP = C + I + G + NX, where C is consumption by households, I in investment (business spending), G is government is spending, and NX is net exports (exports minus imports). So this is how GDP is equal to total expenditure, expenditure being another word for spending. GDP is also equal to total income because every dollar that is spent is spent to pay someone. For example, if you buy an apple at a grocery store for a dollar, some of that dollar will go to the government, some to the employees of the store, some to the business owner as profit. Every time money changes hands (in a transaction) it is the income of someone (the one who received it) and the expenditure of someone else (the one who gave it). Some possible transactions are: You get paid: you receive income equal to the expenditure of your employer; You buy something: your expenditure is equal to the income of the shop selling you the item; GDP just totals up the amount of all these transactions and so is equal to the total income or total expenditure (as both are equal) in an economy..
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.
Why an economy's income must be equal to its output?
Because output generates income.
Is the value of the GDP calculated by the income approach equal to the value of GDP calculated by the expenditure method?
YES
Why an economy's income must equal its expenditures?
Because every dollar of spending by a buyer is a dollar of income for a seller
How do you measure gross national product?
By one of: 1) Income. Sum up all income in the economy from all sources. 2) Expenditure. Sum up all sources of spending in the economy. 3) Value-added. Sum up all value-added in the production of goods. All of which are equal.
What is IS curve?
It is the locus of combinations of the interest rate and the level of real national income for which desired aggregate expenditure equals actual national income.So called because, in a closed economy with no government, it also reflects the combinations of the interest rate and national income for which investment equals saving, I=S. In general, it reflects points for which injections equal withdrawals.
What is an IS curve?
It is the locus of combinations of the interest rate and the level of real national income for which desired aggregate expenditure equals actual national income.So called because, in a closed economy with no government, it also reflects the combinations of the interest rate and national income for which investment equals saving, I=S. In general, it reflects points for which injections equal withdrawals.
