What is the difference between aggregate expenditure and aggregate income?

What is the difference between aggregate expenditure and aggregate income Introduction: The Macro Perspective Hello everyone! Welcome to our video on aggregate expenditure and aggregate income. When it comes to understanding the overall health and performance of an economy, these two concepts play a crucial role. Today, we'll be exploring what they are, how they differ, and why they matter. So, let's dive in! Defining Aggregate Expenditure Aggregate expenditure refers to the total amount of spending in an economy over a given period. It encompasses consumption by households, investment by businesses, government spending, and net exports (exports minus imports). Essentially, it represents the demand side of the economy, indicating how much is being spent on goods and services. Understanding Aggregate Income On the other hand, aggregate income represents the total earnings generated within an economy during a specific timeframe. It includes wages, salaries, profits, and other forms of income. Aggregate income is often viewed as the supply side of the economy, reflecting the total value of goods and services produced. Components of Aggregate Expenditure