Equilibrium level of income can be determined at:(a). Full employment (b). Under full employment(C). Over full employment (d). Any of the above

To answer the question about the equilibrium level of income, we must understand how equilibrium income is conceptually defined in economics.

Understanding Equilibrium Level of Income

1. Equilibrium Level: The equilibrium level of income refers to a situation where the total production (or output) in an economy is equal to the total planned expenditure. At this level, there are no tendencies for output to change, as what is produced is exactly what is demanded.

2. Full Employment: This refers to a situation where all available labor resources are being used in the most efficient way possible. In classical economics, full employment is considered achievable in the long run.

3. Under Full Employment: This scenario involves an economy where not all resources are fully utilized, typically leading to unemployment.

4. Over Full Employment: This is a situation where the economy is producing beyond its capacity, which can lead to inflationary pressures as resources become strained.

Analysis of Options

• (a) Full Employment: At full employment, the economy can reach equilibrium as all resources are utilized effectively.

• (b) Under Full Employment: The economy can still reach an equilibrium level even if it is not fully utilizing its resources.

• (c) Over Full Employment: The economy might reach an equilibrium level theoretically, but this situation is unsustainable in the long term.

• (d) Any of the Above: This option suggests that equilibrium can be achieved in any of these scenarios.

Conclusion

The most accurate choice is (d) Any of the above, because equilibrium can indeed be reached regardless of the employment level. Whether the economy is at full employment, under it, or even over it, equilibrium income can be determined under all these conditions. However, the sustainability of that equilibrium may vary based on the employment condition.

Thus, the answer to the question is:

Final Answer

(d) Any of the above