Download National Income

National Income
National Income can be divided into 5 categories
1. Wages and Salaries: payment to laborers including social insurances,
benefits (approx. 3/4 or 75% of National Income)
2. Proprietor’s’ income: the net income of unincorporated businesses—
proprietorships, partnerships, and cooperatives ( 5% of NI)
3. Corporate Profits: the productive role of any business is to combine the
factors of production, In return, they receive profit ( 9% of NI)
4. Interest: We can connect interest with capital. Interest is the payment
that firms pay for money that they use for capital ( 10% of NI)
5. Rent: The owners of land and other natural resources receive rent as
payment for the use of their factor resources ( 2% of NI)
Employment
Maximizing employment is a primary macroeconomic goal because of what
it gains for us and what we lose in its absence.
Increase GDP—full employment
Full employment- The highest natural level of employment that our
economy can attain at a given moment.
Inflation
Inflation rate: The increase in prices from one year to the next, expressed
as a percentage.
Demand-pull inflation: Inflation caused by too many dollars chasing the
goods and services that are available.
Cost-push inflation: Inflation caused by an increase in the cost of
production, which ripples through the economy as businesses pass along
their increased expenses.