Aggregate income is an economic term that is used in macroeconomics to determine certain monetary aggregates. This income is not more than the total received due to production factors, during a certain time.
There are an economic model ideal for measuring aggregate income, which receives the name of Keynesian model, used to identify the equilibrium level and disruptions that occurred in the markets of goods and services.
This mathematical model indicates that if there is an unused production capacity, the prices of the products are of the production, however if there is an increase in demand there may be an increase in production but without significantly affecting prices.
This Keynesian model not only measures production expenses but also assesses the expenses made by governments, that is, this principle indicates that government expenses are determined by external agents, giving as an example the fact that a government cannot invest in investment. indebt.
In a different vein but parallel to the same topic, there is aggregate spending, the opposite term to aggregate income, since it measures the approximate value of the goods and services that an economy is going to produce. It is responsible for measuring the behavior of said activity or gross domestic product (GDP). The formula for its calculation is: consumption plus planned investment (GA = C + L).
In conclusion it can be said that the aggregate income is the money that all the people of a nation receive for having sold some good or service, while the aggregate expense is what these same individuals decide to spend on the purchase of goods and services.
