National Income

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National Income

Purpose of economic activity is to improve welfare and better standard of living and to do this you need to;

Increase level of consumption in return Economy produces more output/national income. 

Stocks - something gathered overtime and measured at a particular point e.g. wealth

  • national capital stock - natural resources and capital goods gathered from previous production
  • stock of human capital - skills of working population

Flow - something continuous (flow of income) that's measured per period of time e.g weekly

National income is the flow of new output produced during a period of time combining stocks of physical and human capital. Measured by:

National product = National income = National expenditure

because they mean the same thing.

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