Pages in this set

Page 1

Preview of page 1
TOLU ADAMOLEKUN
NATIONAL INCOME NOTES

National income is the flow of new output produced by the economy in a particular period.

National income is measured by:

NATIONAL OUTPUT
NATIONAL INCOME
NATIONAL EXPEDITURE

ECONOMIC GROWTH
The increase in the potential level of real output the economy can period of time
This…

Page 2

Preview of page 2
The more different GDP and GNP are, the more the country is involved in international trade
and finances. A great example of this would be Japan.

DIFFERENCE BETWEEN MONATERY FLOW AND REAL FLOW?

Real flows are actual goods, services and resources flowing from one sector to another,
usually in exchange…

Page 3

Preview of page 3
Two separate measures of inflation used in the UK:
RPI (Retail Prices Index) - based on a representative cross-section of products
purchased by a typical UK household. In October 2012 RPI inflation was 2.6%.
CPI (Consumer Prices Index) - more closely comparable to measures used
throughout the EU. Excludes costs…

Page 4

Preview of page 4
The economic cycle is the tendency of national or global economic activity to fluctuate
between boom, recession, slump and recovery.
Boom a time of rapid economic growth, typically linked with:
Increased consumer spending as people feel confident and are more likely to
borrow money to finance more spending.
Low unemployment.…

Page 5

Preview of page 5
then contract supply as a response to weaker demand. For many businesses price
discount were used to offload excess stocks. Others took the decision to close down
some of their production operations. Real GDP fell by more than 6 per cent from the
peak of the economic cycle to the…

Page 6

Preview of page 6
the economy in a given time period.
· When aggregate demand is well below the productive potential of the economy
(so called potential GDP) then a negative output gap exists. In simple terms, current
output and spending is well below what the economy could normally sustain. In this
situation there…

Comments

No comments have yet been made

Similar Economics resources:

See all Economics resources »See all resources »