Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

1
...

National income is the total value a country's final output of all new goods and services
produced in one year
...
”
Raising national income is the important goal of all economic activity
...
The changes in national income statistics show how the economy is developing
and enables the government to lay down the appropriate economic policy necessary under
the circumstances
...
e
...
With the help of national income statistics it is possible to chart
cyclical movements, find out the level of inflation, measure economic growth and
development and evaluate and compare a countries standards of living with other countries
...
It measure the level of production in the year
...

Economic welfare depends to a considerable degree on the level of national income
and the average standard of living of the people
...

Comparing national income estimates over a period of time, we can know whether
the economy is growing, stagnant or declining
...
Further, by comparing the per capita income over years,
we can know the changes in the standards of living and economic welfare of the
people
...
, to the national income
...

Distribution of national income between wages on the one hand and profits, interest,
rent on the other, is of special significance, since inequality in personal incomes
depends to a large extent on the share of working classes and the share of property
owners
...
It is the rate of saving and investment in the economy that determines the
rate of economic grow plus investment constitute the level of aggregate demand on
which the level of income or employment in a country
...




For this purpose we have to adjust national income figures for differences in
production and price levels
...

National income estimates are a valuable guide to economic policy especially in
these days of development planning and active government intervention in the
economy
...


2
...
It is not the same as standard of living but
is more concerned with the quality of life that includes factors such as the quality of the
environment (air, soil and water), level of crime, extent of drug abuse, availability of essential
social services, as well as religious and spiritual aspects of life
...
Gdp is often used as an indicator of
standard of living of people in a country, where as this method of estimating standards of living
of a country has advantages there are many criticism surrounding it
...

First; an increase in level of inflation in a specific country will lead to an increase in the country’s
national income if the country is economically healthy
...
However in some rare cases the rise in prices of goods and services may mean that
there is a genuine increase in quality of the produced goods hence meaning that the standards
of living of the citizens have generally improved
...
That the income of the rich decreases in such a way that their overall
productive capacity, investment and capital accumulation do not decline
...

Information about a country’s national income can be used in economic planning
...
This information will assist the government in the planning and evaluating the
state of a country’s standards of living
...
E
...
if the government notices a continuous increase in the national income
statistic it can conclude the citizens have improved living standards
...

National income statistics can help us have an overview of the economic structures like how
income is distributed amongst the various sectors
...
ie agriculture or by industries
...
This information will be helpful to the government as they will know which sector
to improve on so as to raise the people’s standards of living
...
A government may
decide to increase taxes on a particular sector of the economy and decrease taxes on another
different sector of the economy so that they may bring about uniform standards of living
amongst its citizens
...
This may
be used by economists to tell whether a country’s population are having high or low standards
of living
...
I
...
how the population
is spending their money (Per Person purchasing power)
...
And also if a population spends most of their
money on essential house hold goods then one may conclude that the living standards of the
population is low as they spend money on essentials
...
This information can be compared between 2 countries which will show how the
progress of the two economies
...
It gives a consistent and accurate data reading
which makes it possible to give in most cases the correct predictions of the living standards of a
country
...
The value of goods and
services produced in a country shows how rich or how poor a country really is therefore it is a
clear indication of the citizens living standards
...
e
...
Doing this volunteer works will actually lead to lower GDP when volunteers do
work that might otherwise have gone to a paid employee hence Gdp not a good measure of
social welfare in a country
...
I
...
during wars, during oil spills, during
disease outbreaks etc
...
This may however be misinterpreted by some as an indication of increase in
social welfare of citizens which may not be the case
...
This situation will lead to them
spending more money in replacing the worn out good that may lead to a situation where Gdp of
a country increases
...

An increase in Gdp does not necessarily mean increase in living standards of people
...
e
...
It will take time before the citizens begin to benefit from the structures and
Improvement of living standards will occur in the future therefore increase in Gdp cannot mean
increase in living standards
...
markedbyteachers
...
html
Wikipedia definition of social welfare
https://www
...
com/To-what-extent-does-national-income-measure-social-welfare
https://www
...
com
Macroeconomic Theory
By Jean-Pascal Bénassy
Oxford University Press, 2011
Reflections on the Development of Modern Macroeconomics
By Brian Snowdon; Howard R

---