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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.
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
Explain why an economy income must equal it's expenditure?
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.
What does the income-expenditure identity say about the relationship between income and expenditure?
The income-expenditure identity states that in an economy, total income equals total expenditure. This means that the amount of money earned by individuals and businesses is equal to the amount of money spent on goods and services.
Why does aggregate income equal aggregate expenditure?
Aggregate income equals aggregate expenditure because, in an economy, every dollar spent on goods and services (expenditure) generates an equivalent dollar of income for someone (income). This relationship is rooted in the circular flow of income and expenditure, where households receive income from firms in exchange for labor and then spend that income on goods and services produced by those firms. Thus, total spending in the economy matches total income generated, ensuring that aggregate income and aggregate expenditure are equal.
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.
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
Explain why an economy income must equal it's expenditure?
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.
Is saving an injection into and investment a leakage from the income expenditure stream?
Savings are a leakage from the income expenditure stream because they drain on the economy
What does the income-expenditure identity say about the relationship between income and expenditure?
The income-expenditure identity states that in an economy, total income equals total expenditure. This means that the amount of money earned by individuals and businesses is equal to the amount of money spent on goods and services.
What is the approaches to GNP Accounting?
output(production) , income & expenditure .
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.
What is the effect of high dependency ratio?
(A)inadequate manpower in the economy(b)low level of production(c)low per capital income(d)increase in government expenditure
How do injections and withdrawals affect the size of the circular flows of income and expenditure in an economy?
Ffff
What are ways of measuring the economy?
1) Measure all of the income in an economy (wages, taxes, transfers, etc.). 2) Measure the value-added on goods (i.e.) the change in value when wood is turned into a chair). 3) Measure all expenditure (consumption, investment, government spending, etc.). All three of these methods are used in income accounting and should always end up with the same result. This is because all income in an economy must be expended and the value of the expenditure and income is equivalent to the value of production (value-added to goods).
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
