Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Using Factor Incomes for Calculating National Income
A second method is to sum up all the incomes to individuals in the form of wages, rents, interests and profits to get domestic incomes. This is because each time something is produced and sold someone obtains income from producing it. It follows that if we add up all incomes we should get the value of total expenditure, or output. Incomes earned for purposes other than rewards for producing goods and services are ignored. Such incomes are gifts, unemployment or relief benefits, lottery, pensions, grants for students etc. These payments are known as transfer income (payments) and including them will lead to double counting. The test for inclusion in the national income calculation is therefore that there should be a "quid pro quo" that the money should have been paid against the exchange of a good or service. Alternatively, we can say that there should be a "real" flow in the opposite direction to the money flow. We must also include income obtained from subsistence output.
This is the opposite case from transfer payments since there is a flow of real goods and services, but no corresponding money flow. It becomes necessary to "impute'' values for the income that would have been received. Similarly workers may, in addition to cash income, receive income in kind; if employees are provided with rent free housing, the rent which they would have to pay for those houses on the open market should, in principle, be "imputed" as part of their income from employment. The sum of these incomes gives gross domestic product GDP. This includes incomes earned by foreigners at home and excludes incomes earned by nationals abroad. Thus, to Gross Domestic Income we add Net property Income from abroad. This gives Gross National Income. From this we deduct depreciation to give Net National Income.
Gains From International Trade The gains from International trade are to make the participating countries better of than they would have otherwise been. This will be the res
Hayek explaination Under a fractional reserves system, it is possible for the banking system to supply resources to entrepreneurs for investment in excess of resources that are
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
You have opened your own word processing service. You have already bought a special computer needed for word processing and paid $5,000 for it. However, due to the cost changes in
how it is revalent?
Arguments against Monopoly However monopolies have been accused of the following weaknesses. Diseconomies of scale While the monopolistic firm ca
who are the contributors in economics and what they contribute in economics
what are the four factors that lead to diseconomies of scale.
A firm supplied 3000 pens at the rate of Rs 10. Next month, due to a rise of in the price to 22 rs per pen the supply of the firm increases to 5000 pens. Find the elasticity of sup
manual problems solution of demand theory
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd