Tag Archives | Determination of National Income

The theory of determination of national income is concerned with finding out the equilibrium level of national income, i.e., the level of national income at which the purchas­ing and production plans of the economy are synchro­nised. This occurs at the point of the intersection of the ag­gregate demand (C + I) sched­ule and the aggregate supply (C + S) schedule. [...]

In this article we will discuss about the importance of multiplier in the determination of national income. Also learn about the assumptions of the multiplier. One of the central concepts of modern macroeconomics is the multiplier. The Keynesian income determination model shows how the interaction of consumption and investment spending determines the level of national output. Clearly, an increase in [...]