National income refers to the total monetary value of all goods and services produced in a country within one year. It includes production from sectors like agriculture, industry, government, wholesale and retail trade, banking, education, and professional services. National income is a key macroeconomic indicator that determines the overall business conditions and economic status of a nation. The level of national income impacts aggregate demand for goods and services, while its distribution patterns aggregate demand across different types of goods and services.
National income refers to the total monetary value of all goods and services produced in a country within one year. It includes production from sectors like agriculture, industry, government, wholesale and retail trade, banking, education, and professional services. National income is a key macroeconomic indicator that determines the overall business conditions and economic status of a nation. The level of national income impacts aggregate demand for goods and services, while its distribution patterns aggregate demand across different types of goods and services.
National income refers to the total monetary value of all goods and services produced in a country within one year. It includes production from sectors like agriculture, industry, government, wholesale and retail trade, banking, education, and professional services. National income is a key macroeconomic indicator that determines the overall business conditions and economic status of a nation. The level of national income impacts aggregate demand for goods and services, while its distribution patterns aggregate demand across different types of goods and services.
and services produced in a country during a financial year. In other word s, the final outcome of all the econ omic activities of the nation during a period of one year, valued in terms of money is called as a National inc ome. n the above definition, the eco nomic activities include all the hum an activities that produce goods and services that can be valued at mark et price. Such as production by farm ers, production by firms in different industrial sectors, production of good s and services by government, service es produced by business intermediary es Viz. Wholesalers and retailers, ban ks and other financial institutions, ed ucational institutes and professionals like doctors, teachers, lawyers, etc.
Also, there are non-economic active
ities that include the production of go ods and services but do not have an y market value. Such as hobbies, se rvices of housewives, service to self, a n exchange of mutual service between neighbors, etc. The National Income is a vital macroec onomic variable which determines the business level and economic status of the nation. The level of national inco me determines the aggregate dema nd of goods and services while its dis tribution defines the pattern of aggre gate demand, i.e., what kinds of goo ds and services are produced and de manded.
Inflation is a quantitative measure of the ra
te at which the average price level of a bas ket of selected goods and services in an ec onomy increases over a period of time. Often expressed as a percentage, inflation indicat es a decrease in the purchasing power of a nation’s currency. As prices rise, they star t to impact the general cost of living for the common public and the appropriate mone tary authority of the country, like the centr al bank, then takes the necessary measure es to keep inflation within permissible limit s and keep the economy running smoothly . Inflation is measured in a variety of ways depending upon the types of goods and s ervices considered, and is the opposite of deflation which indicates a general decline occurring in prices for goods and services when the inflation rate falls below 0 percent.