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What is equilibrium income? -

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Question

What is equilibrium income?

Options

  • The equilibrium income is defined as the level of income where AD = AS

  • Planned savings is always = to the planned investment

  • Both The equilibrium income is defined as the level of income where AD = AS and Planned savings is always = to the planned investment.

  • None of the above

MCQ

Solution

Both (1) and (2)

Explanation:

The level of income known as equilibrium income is defined as AD = AS, which indicates aggregate demand equals aggregate supply. The intended investment is always equal to the projected savings. 

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