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UI Post-UTME Economics 2021 (Model questions) Question 17

Question 17

National Income

Equilibrium level of income is...........

  1. A.The maximum level of income the economy can produce
  2. B.The level of income that fully employs the economy's resources
  3. C.The level of income equalling the aggregate spending of the economy
  4. D.The level of income that satisfies the preferences of all households in the economy
Show the answer and explanation

Answer: C (The level of income equalling the aggregate spending of the economy)

Explanation

Income is in equilibrium when aggregate spending equals national income (output).