Answer to Question #254950 in Macroeconomics for thato

Question

Q.4.1 State the three possible relationships between production, income and spending in macroeconomic theory.

Answer 1

1.      The household spends income earned from payment of factors of production to pay for goods and services produced

2.      The total income is equal to the spending and production

3.      All the income must be spend on purchasing goods and services produced