National income

Senior cycle: the circular flow of income The expenditure method Reason for calculating national income Limitations of national income statistics Intellectual Propert GDP,GNP,GNI,GNDI The multiplier The business cycle

What is national income ?

the income accruing to the permanent resident in a country from current economic activity during a period of time

Define the term recession?

the fall in gross domestic products in two successive quarter

What are some leakages in the circular flow of income

Tax: household has to pay some of their income to the government (leakage for the household)

Savings: household have some of their income in financial institution ( leakages for the government as the money isn’t go around in the economy )

Imports: household spend some of their income on imports(goods in Ireland but from a different country).( leakages as they are not contributing to Ireland national income)

What are some injection in the circular flow of income

Government expenditure: government spend money on output firm ( eg schools ,hospitals)

Investment: financial institutions lend money back in to the economy for investment purposes e.g investors lend money to house developers

Exports: Irish firms receive money from consumer in foreign markets who buy their export. This contributes to irelands national income.