Meaning Of Equilibrium?
By equilibrium we mean the state of balance or state of no chang.by
equilibrium national income we refer to that level of national income.
At the equilibrium level of national income there is no tendency
for income/output to rise or fall.
In the keynesian two-sector economy there are only household and
business sectors.
Government is absent and the economy is a closed one.in this simple
economy there are two elements of national income_consumption and
investment ,i.e,C+
I.An economy is said to be in equilibrium when aggregate expenditure
equals aggregate income
Aggregate demand=money value of output(income)
Or Y=C+1 Equilibrium income (y) is the endogenous variable to be
determined………….
The two approaches to determine equilibrium level of income,output and employment in the
economy are;
1. Aggregate Demend-Aggregate supply Approach (AD-AS Approach)
2. Saving -investment. Approach (S-i Approach)
It must be kept in mind that AD,AS, Saving and investment are all planned or ex-ante …
Discuss Different Concept of National income with help of
example?
National income is total amount of good and services
produced within the nation during the given period say,1 year. It is the
total of factor income i.e wages, interest ,rent,profit,received by factor of
production i.e labour, capital,land,and entrepreneurship of a nation.
ConcepTS of National Income
There are various concepts of National Income,such as GDP,GNP,NNP,NI,PI,DI,and PCI which explain the
facts of economics activities.
1.GDP at market price: is money value of all goods and services produced
within the domestic domain with the available resources during a year.
GDP=(p*Q)
Where,
GDP=gross domestic product
P= price of goods and services
Q= Quantity of goods and services
Gdp is made up of 4 components
Consumption
Investment
Government expenditure
Net foreign exports of a country
GDp=C+I+G(X-M)
Where,
C=government expenditure
(X-M) =Export minus import
NFIA=Net factor income form abroad.
1.Net National product (NNP) …is market value of net output of final goods and
services produced by an economy during a year and net factor income from
abroad.
NNP= GNP-Depreciation
Or,NNp=C+I+G(X-M)+NFIA -IT
Depreciation
Where,
C=Consumption
I =investment.
G=Government expenditure
Expenditure Method.
In this National income is measured as flow of expenditure
We can calculate Ni thought Expenditure Method as.
National income = National
Product= National Expenditure…..
How Carona virus effect on the economy of developed and
under developed country?
The covid-19 crisis,which first hit the developed world, is now spreading into
developing countries.Experts from the united nation (UN) united nations
development Program (UNDP)and the world health organization (WHO)have
stressed deep concern about the long -trem impact the pandemic could have on
these nation..
Developing countries tend to be poorer, working to become more advanced
economically and socially_their infrastructures aren as established as those you
find in Europe and the us. They also rely on primary sector roles_and so they are
particularly impacted by distrusted by supply chains and lower demand for there
goods …
If a poorer country can’t sell it’s resources ,then a huge percentages of
it’s national businesses and work forcess are going to feel the pinch .There in lies
the problem When a global pendmic hits and their richer trading partners shut
there borders…..
They impact On pOorer Countriess Right Now.
Already, more then 90 developing countries have approach the
international monetary found (IMF)for access to it’s emergency
founding and financial assictencess . 24 of the IMF’ low-income
member
countries are benefiting from immediate debt relief so far. But the IMF’
is calling for the temporary suspension of debt payment of Banks for the
poorest developing country ..
If we look at sub-saharan African gorvnment as an example of how fiscal
inflexibility is damaging their ecnomies when faces with closed borders and
desspessed supply chains ,we’re seeing the impact thought depressed commodity
revenues (Less money for tradebal goods) ,
Average number of qualified health care workers per 1,000
people
2.2 14
Africa. Europe
Covid 19 the future impact On Developing econmices..
I expect difficulties in repaying ….. debt in the years to
come ..he says,,, the situation in many country may in
fact become Soo dire that they may experience
wife’spread hunger and state failure, with a decade lost
to ecnomice growth….
Thanku for
This attention !
Any Questions??