Problem 20

Introduction

The AD-AS (aggregate demand- aggregate supply) model basically determine the illustrating national income and change in the price level. Whereas aggregate expenditure is the current value of all the finished goods and services in the economy. Aggregate expenditure is the same of expenditure incurred by the 4 factors of the economy - household, private sector, government sector and export. In equation it is represented as AE=C+I+G+X.