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Growth of National Income & Per Capita Income Video Lecture | Business Economics for CA Foundation

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FAQs on Growth of National Income & Per Capita Income Video Lecture - Business Economics for CA Foundation

1. What is national income and how is it measured?
Ans. National income refers to the total value of goods and services produced within a country's borders in a specific time period, usually a year. It is measured using methods such as the income approach, expenditure approach, and production approach. These methods involve calculating the sum of all incomes earned by individuals and businesses, the sum of all expenditures on goods and services, and the value added at each stage of production, respectively.
2. What is per capita income and how is it calculated?
Ans. Per capita income is the average income earned per person in a country. It is calculated by dividing the total national income by the total population of the country. This measure allows for a comparison of the standard of living across different countries or over time within a single country.
3. How does the growth of national income impact a country's economy?
Ans. The growth of national income is an important indicator of a country's economic performance. It signifies an increase in the production and consumption of goods and services, which leads to higher employment rates, improved living standards, and increased tax revenues for the government. It also indicates the overall health and strength of the economy, attracting investments and fostering economic development.
4. What are the factors that contribute to the growth of national income?
Ans. The growth of national income is influenced by various factors, including investment in physical and human capital, technological advancements, natural resources, government policies, trade, and international economic conditions. These factors contribute to increased productivity, innovation, efficiency, and competitiveness, which are key drivers of economic growth.
5. How does per capita income differ from national income in terms of measuring economic well-being?
Ans. While national income measures the total value of output produced in a country, per capita income provides a more accurate measure of individual economic well-being. National income does not take into account the distribution of income among the population, whereas per capita income reflects the average income earned by each person. This measure allows for a better understanding of income inequality and the distribution of wealth within a country.
135 videos|190 docs|88 tests
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