National income determination, Microeconomics

National Income Determination:

National Income Determination deals with what determines the size of a nation’s national income. The size of a nation’s national income is determined primarily by the size of its planned aggregate expenditure.

This is planned total spending in an economy on domestically produced goods and services within a specified period of time. It is determined as the sum of planned spending by all sectors of the macro economy represented as household spending on consumption (C), firms (I), government (G), exports (X) and imports (M)
 
Equilibrium national income occurs when the total level of output produced in the economy exactly matches the level of planned total spending (aggregate expenditure) in the economy.

The Multiplier analyses the magnifying effects of changes in leakages and/or injections on equilibrium income.

The accelerator principle deals with the relationship between net investment, the stock of capital and the level of income or output. The principle indicates that net investment will take place only when aggregate output is increasing.

Posted Date: 1/3/2013 12:10:17 AM | Location : United States







Related Discussions:- National income determination, Assignment Help, Ask Question on National income determination, Get Answer, Expert's Help, National income determination Discussions

Write discussion on National income determination
Your posts are moderated
Related Questions
The elasticity coefficient is a number measured using price and quantity data to verify how responsive consumers are to changes in the price of a commodity.  The elasticity coeffic

risk describe,prefrence towards risk,the demand for risky assets.consumer behaviour under asymmetricinformation

what is demand forecasting and defines its techniques

Explain the how the classical school views the role of markets and government intervention in fighting business cycles The classical school believes in the smooth functioning o

Price elasticity of supply – Computes the percentage change in quantity supplied resulting from a 1 percent variation in price. – The elasticity is usually positive as price

Q. What is Heterodox Economics? Heterodox Economics:Different schools of thought (including post-Keynesian, Marxian, structuralist and institutionalist economics) which reject

The economic model forecasting involves estimating several simultaneous equations which are generally behavioural equation mathematical identities and market clearing equations. T


Labor Total Output 1 30 2 50 3 60 4 75 5 80 a) If the price of the firm’s output is $12 per unit and the wage rate is $100 per worker, how many workers should the firm choose to

Volume of Trade: It relates to the size of international transactions. Since a large number of commodities enter in international transactions and their aggregate can be found