Sunday 22 March 2009

national income

of measures of national income and output are used in economics to estimate total economic activity in a country or region, including Gross Domestic Product (GDP), Gross National Product (GNP), and Net National Income (NNI).
How to increase national income:
We can use this formula, G+I+C+(X-M)
Because increase national income which also can say increase in AD, according to above, we can see:
1. Increase government spending which can reduce the unemployment and encourage some small business
2. Reduce interest rate , because more and more investment will build cause of lower interest rate that they can borrow money easier.
3. Decrease exchange rate , that's means the price of export cheaper, and more countries would like to buy products from this country and the injection will increase.
4. Increase productivity
The affect of national income increase
1) economic growth.
2) Inflation(demand very high)
Living standard increase

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