hustlr
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In my book it tells me for macro that Aggregate demand = National Output = National Income

How is that so ?
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vidi2020
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Basically...
- An economy is made up of firms and households.
- Firms produce goods+services and these goods+services make up NATIONAL OUTPUT
- Households in a country provide the land, labour, and capital (the factors of production) that firms use to produce the national output.
-The money paid to the households by the firms for these factors of productions is called NATIONAL INCOME
-Households spend the money they get from the national income on goods and services- this is called NATIONAL EXPENDITURE

You have to think of this as a cycle therefore they would all be equal (at full employment)
NATIONAL OUTPUT = NATIONAL INCOME = NATIONAL EXPEDINTURE

Hope this makes sense
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hustlr
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(Original post by vidi2020)
Basically...
- An economy is made up of firms and households.
- Firms produce goods+services and these goods+services make up NATIONAL OUTPUT
- Households in a country provide the land, labour, and capital (the factors of production) that firms use to produce the national output.
-The money paid to the households by the firms for these factors of productions is called NATIONAL INCOME
-Households spend the money they get from the national income on goods and services- this is called NATIONAL EXPENDITURE

You have to think of this as a cycle therefore they would all be equal (at full employment)
NATIONAL OUTPUT = NATIONAL INCOME = NATIONAL EXPEDINTURE

Hope this makes sense

Ohh ok that makes sense, so national expenditure is the same as AD? From what I understand AD is the demand for the factors of production, is that right?
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vidi2020
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(Original post by hustlr)
Ohh ok that makes sense, so national expenditure is the same as AD? From what I understand AD is the demand for the factors of production, is that right?
umm I'm not quite sure how it fits in with AD as I haven't been taught macro properly yet at school. My previous reply is what my revision guide said and it did not mention anything about AD=N.E. so I'm not too sure about that. Hopefully, someone who understands replies to u if not ask your teacher! But I hope you understood the national output = national input part. BTW what board are you on?
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hustlr
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(Original post by vidi2020)
umm I'm not quite sure how it fits in with AD as I haven't been taught macro properly yet at school. My previous reply is what my revision guide said and it did not mention anything about AD=N.E. so I'm not too sure about that. Hopefully, someone who understands replies to u if not ask your teacher! But I hope you understood the national output = national input part. BTW what board are you on?
I’m on AQA and yeah I understand national output=national income thankss
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vidi2020
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(Original post by hustlr)
I’m on AQA and yeah I understand national output=national income thankss
Ahh ok, I'm on OCR.
That's good. I am more than happy to help you with micro. Macro isn't my strongest point tbh.
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hustlr
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(Original post by vidi2020)
Ahh ok, I'm on OCR.
That's good. I am more than happy to help you with micro. Macro isn't my strongest point tbh.
Oh cool I’ll reach out if I need help thanks
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