Answer to Question #176103 in Macroeconomics for Fikir

Question

1,State the problems of aggration

2,Explain tolal out put which means national proudut, national expenditure and national income?

3,Wht is micro economics equilibrium ?

4,State circular flow of clouse of open micro model?

Answer 1

1. The aggregation problem is the difficult problem of finding a valid way to treat an empirical or theoretical aggregate as if it reacted like a less-aggregated measure, say, about behavior of an individual agent as described in general microeconomic theory.

2. National product is the value of all the goods and services produced in the nation.

National income is the total income created by producing the national product.

National expenditure is the term used to describe the total spending output in a particular country's economy.

National Income = National Product = National Expenditure.

In other words, there are three measures of national income of a country.

3. In microeconomics, economic equilibrium may also be defined as the price at which supply equals demand for a product, in other words where the hypothetical supply and demand curves intersect.

4. The circular flow model demonstrates how money moves through society. Money flows from producers to workers as wages and flows back to producers as payment for products. In short, an economy is an endless circular flow of money.