CA Foundation Exam  >  CA Foundation Questions  >  The aggregative expenditure method and family... Start Learning for Free
The aggregative expenditure method and family budget method always give:
  • a)
    Different results
  • b)
    Approximate results
  • c)
    Same results
  • d)
    None of them
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
The aggregative expenditure method and family budget method always giv...
The Aggregative Expenditure Method and Family Budget Method always give the same results.

Explanation:

The Aggregative Expenditure Method and Family Budget Method are two different approaches used to analyze and determine the total expenditure or consumption in an economy. Despite their differences in approach, they both aim to calculate the overall expenditure or consumption accurately. Therefore, they always give the same results.

Aggregative Expenditure Method:
The Aggregative Expenditure Method, also known as the National Income Method, is used to calculate the total expenditure or consumption in an economy. It involves summing up the expenditures of all sectors, including households, businesses, and the government. The components of aggregate expenditure include consumption (C), investment (I), government spending (G), and net exports (NX). The formula for aggregate expenditure is:
AE = C + I + G + NX

Family Budget Method:
The Family Budget Method, also known as the Consumer Budget Method, focuses specifically on the expenditure or consumption of households or families. It involves analyzing the income and expenditure patterns of individual households to determine their overall consumption. This method takes into account various expenses such as food, housing, transportation, healthcare, education, and other household necessities.

Why do they always give the same results?
Although the Aggregative Expenditure Method and Family Budget Method differ in their scope and approach, they ultimately calculate the same concept: total expenditure or consumption.

The Aggregative Expenditure Method considers the expenditures of all sectors in the economy, including households. It takes into account the consumption patterns of households, along with other factors such as investment, government spending, and net exports. In doing so, it provides a comprehensive view of the overall expenditure in the economy.

On the other hand, the Family Budget Method focuses specifically on the expenditure patterns of households. It analyzes the income and expenses of individual households to determine their consumption. By considering various categories of expenditure like food, housing, transportation, and healthcare, it provides a detailed understanding of household consumption.

Since both methods aim to calculate the total expenditure or consumption in an economy, they take into account the same underlying factors. The Aggregative Expenditure Method incorporates the consumption patterns of households, which is the main focus of the Family Budget Method. Therefore, when both methods are applied correctly, they will always yield the same results.

In conclusion, the Aggregative Expenditure Method and Family Budget Method always give the same results because they both aim to calculate the total expenditure or consumption in an economy, despite their differences in approach and scope.
Explore Courses for CA Foundation exam
The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer?
Question Description
The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer?.
Solutions for The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The aggregative expenditure method and family budget method always give:a)Different resultsb)Approximate resultsc)Same resultsd)None of themCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev