National Income

NotesQuizObjective Test

National Income

is basically total Income earned.

In other words, the value of goods and services produced in a year.

  • In the Exam!

    The terms National Income, GDP and GNP are used interchangeably.

Growth in National Income

National Income can increase due to:

  1. An increase in Aggregate Demand (AD) - the Demand curve moves to the right

  2. An increase in Aggregate Supply (AS) - the Supply curve moves to the right

National Income2

How can AD be increased?

  • Increase in government spending/investment

  • Increase in investment

  • Increase in exports

National Income

How can AS be increased?

  • Increased investment in technology

  • Improvements in training

  • Increased incentive for firms to employ workers

  • Decrease in costs of goods to supply

NotesQuizObjective Test