national income?

Question

does arise in national income always mean that a country's citizens are better off.

Answer 1

No, national income is GDP. Nominal GDP can rise, but if inflation rises faster, real GDP declines. Real GDP is the real mesasure of whether the citizens are better off, since it does not artificially inflate how well off the citizens are. If real GDP declines, it means that the amount of stuff being produced is falling, which is not a good sign for the economy. It is indicative of a recession.

Answer 2

definitely not. the defination of national income are often calculated via GDP. However, there are many flaws in this method, leading to an inaccuracy to gauge the livelihood of the citizens. whether citizens are better off are dependent on the economical and social aspects.

let's first look into the economical aspects.
for citizens to be better off economically, this should mean that they are gaining more net profits in their businesses, or that their net income has increased.

however, a rise in national income does not necessarily means that the public is doing economically better off.
for instance, the rise in national income could be due to inflation. with inflation, prices of goods are higher and naturally, income gain from sales of these goods will increase. yet, this would also mean that consumers would have to pay more instead for their purchases.

secondly, a rise in national income could be due to population growth. as such, with more people working, national income naturally increases. in fact, this does not mean that the income per person has increased thus citizens may not be better off.

let's take a look at the social aspects now.

national income does not depict the social wellness of a country. some examples are longer working hours and military purposes, and environment.

an increase in national income could mean that the citizens are working longer hours instead. For instance, an average australian works about 6 hours while an average japanese works about 10hours. both country's national income are rather similar, but in terms of social aspects, obviously the australians are better off than the japs.

Also, a country's national income could increase due to military development which does not really affect the citizens life. for instance, the ex-soviet union spends alot on developing their military equipments but a regular russian do not really benefit from it. similary, when the USA engaged in war with the middle east, the national income of the former increased due to production of military equipments. yet, americans reap no benefit from it.

a country with higher national income due to high investment rates and a boom in the manufacturing sector could lead to adverse impacts on the environment. for eg, china has been experiencing high growth rate yet, the people are not really better off as there is much pollution caused. on the other hand, iceland may not enjoy such high rates of increase in national income, yet their environment is kept clean and pristine.

there are many more pts which i would love to elaborate on but then i would be writing a full essay. all in all, a rise in national income does not mean that the citizens are better off as there are alot more factors which should be considered.


i would suggest for you to get a copy of John Sloman's economics textbook. it will really help alot.

or try this link:
http://online.bcc.ctc.edu/econ/resource.htm

hope that helps. =)

Answer 3

1. The income generated by a country's production, and therefore the total income of its factors of production. Except for some adjustments that don't usually enter theoretical models, NI is the same as GDP. 2. A measure of the money value of goods and services available to a nation from economic activity. 3. It is the sum total of incomes received by all people of a country over a period of time. It is calculated as gross national product minus depreciation minus sales taxes and other small items. 4. The total income earned by the residents of a country in one year (also called National Output or National Expenditure). 5. A measure of the total level of economic activity which takes place in an economy over a year. 6. The total value of all income in a nation (wages and profits and interest and rents and pension payments) during a given period (usually 1 yr) 7. Measures of national income and output are used in economics to estimate the value of goods and services produced in an economy. They use a system of national accounts or national accounting first developed during the 1940s. Some of the more common measures are Gross National Product (GNP), Gross Domestic Product (GDP), Gross National Income (GNI), Net National Product (NNP), and Net National Income (NNI). National income and output are used in economics to estimate the welfare of an economy through totaling the value of goods and services produced in an economy. They use a system of national accounting first developed during the 1940s. The primary measures of national income and output are Gross Domestic Product (GDP), Gross National Product (GNP), Gross National Income (GNI), Net National Product (NNP), and Net National Income (NNI). There are three main ways of calculating these numbers; the output approach, the income approach and the expenditure approach. In theory, the three must yield the same, because total expenditures on goods and services (GNE) must equal the total income paid to the producers (GNI), and that must also equal the total value of the output of goods and services (GNP). However, in practice minor differences are obtained from the various methods due to changes in inventory levels. This is because goods in inventory have been produced (therefore included in GNP), but not yet sold (therefore not yet included in GNE). Similar timing issues can also cause a slight discrepancy between the value of goods produced (GNP) and the payments to the factors that produced the goods, particularly if inputs are purchased on credit, and also because wages are collected often after a period of production. National income and output are used in economics to estimate the welfare of an economy through totaling the value of goods and services produced in an economy.

Answer 4

No. Inflation can mean a rise in income but a reduction in spending power.

Answer 5

No that all depends if the state gets anything out of it. if the states get more income they can improve food, buildings, sanitation, and schools. bu most of the states income is generated on taxes.