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	National Income
	Explain what is meant by the equilibrium level of national income. Firstly to keep a simple analysis of the equilibrium level of national income some assumptions have to be made. ... The equilibrium level of national income can be determined either using an income-expenditure approach, or by using the Keynesian cross diagram. Using the income expenditure approach we must first determine the planned expenditure or aggregate demand of the economy. ... The consumption function varies with income. However investment (I) is autonomous, independent of income. ... We also have a 450 line (Y=E) along which planned expenditures equal real national income per year. ... At this point there is no tendency for the equilibrium level of real national income to change. Approximate Word count = 538 Approximate Pages = 2.2 (250 words per page double spaced)

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