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Case Study on National Income

In: Business and Management

Submitted By 2193
Words 6867
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INTRODUCTION * Economics is divided into two branches: Microeconomics and macroeconomics.

1. Microeconomics is the study of how individual Households and firms make decisions and how they interact with one Another in markets. 2. Macroeconomics is the study of the economy as a whole. The Goal of macroeconomics is to explain the economic changes that affect many Households, firms, and markets at once.

* Macroeconomists address diverse questions: * Why is average income high in some countries while it is low in others? * Why do prices rise rapidly in some periods of time while they are more stable in other Periods? * Why do production and employment expand in some years and contract In others? * What, if anything, can the government do to promote rapid growth in Incomes, low inflation, and stable employment? * These questions are all macroeconomic in nature because they concern the workings of the entire economy.

* Because the condition of the overall economy profoundly affects all of us, changes in economic conditions are widely reported by the media. Indeed, it is hard to pick up a newspaper without seeing some newly reported statistic about the economy. The statistic might measure the total income of everyone in the economy (GDP), the rate at which average prices are rising (inflation), the percentage of the labor force that is out of work (unemployment), total spending at stores (retailsales), or the imbalance of trade between the united states and the rest of the world (the trade deficit). All these statistics are macroeconomic. Rather than telling us about a particular household or firm, they tell us something about the entire economy.

Meaning and Concepts of National Income (NI) * Consumption is the final aim of the all economic activity .But it must be preceded by production distribution and exchange

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