Equilibrium GDP, Macroeconomics Video Lecture | Macro Economics - B Com

g'day guys now we're going to go into
something that was brought up in
previous videos which is that GDP does
tend to be at this equilibrium where
injections equal withdrawals and
equivalently you've got the money coming
into firms being equal to the money
going out from firms so just to
reiterate we've got money going out from
firms in the form of income which we
know either gets spent by a consumption
or it gets saved or it gets taken out as
tax so savings and taxes are withdrawals
so we can say that income just equals
consumption plus withdrawals we then
have the money coming in to firms which
we can call the aggregate expenditure
and that consists of consumption minus
imports plus investments government
spending and exports of course we can
rearrange the minus imports bring it to
the back here and then we can just put
this together and say this is net
exports and we can say that's a single
injection so a long way of government
spending an investment then we've got
that aggregate expenditure is just
consumption plus injections so if income
is equal to aggregate expenditure
meaning the flows out of firms equals
the flows into firms then this is
equivalently saying that injections
equal withdraw
you