State two approaches to the determination of equilibrium level of income in an economy ?

Answer :

Keyensian theory of income determination explains equilibrium level of income in terms of two approaches

1. Aggregate demand-aggregate supply approach

2. Saving- investment approach

In terms of Aggregate demand-aggregate supply approach, equilibrium level of income and output in the economy is the one where aggregate demand for goods and services is equal to the aggregate supply.

In terms of Saving- investment approach, equilibrium level of income is determined at that level of income where planned investment equals planned saving.

Also read:

Determinationof Equilibrium Income and output (1)

Determinationof Equilibrium Income and output (2)