AD-AS & National Income Determination
In the introductory topic of Macroeconomics prepared by our JC Economics Tutor Simon Ng from Economicsfocus, learn more about the Aggregate Demand (AD) and Aggregate Supply (AS) separately before examining its importance in the comprehension of the AD-AS model. This model is useful in the study of how external factors can affect the General Price Level (GDL) and national income (NY). For AD, different components are covered, namely consumption, investment, government expenditure and net exports. The comprehension of the AD-AS model is crucial to understand the implication of economic indicators and how they are used to derive appropriate macroeconomic policies. National Income Determination (NID) refers to the study of the intersection between the Aggregate Demand (AD) and Aggregate Supply (AS), such that the General Price Level (GPL) and National Income (NY) are obtained. National Income is also measured in terms of real Gross Domestic Product (GDP). Similar to the previous topic on the study of the AD-AS model, NID is better understood by examining specific components, such as consumption and investment activities.