2.4.1 National Income

Question 1

Income

Answer 1

A flow of money that goes to the factors of production

Question 2

Wealth

Answer 2

A stock of assets

Question 3

National income

Answer 3

Measures of the monetary value of the flow of output of goods and services produced in an economy over a period of time

Question 4

Aggregate Demand

Answer 4

Consumption + Investment + Government Spending + Net Trade (Exports - Imports)

Question 5

Households

Answer 5

Receive income through wages and salaries from jobs and any investment
Spend income to buy goods and services from firms

Question 6

Firms

Answer 6

Spend the factors of production inputs by paying wages and rents when making products
Receive payment from consumers which creates revenue and profits

Question 7

Government

Answer 7

Receive revenue (taxes) to fund spending on public services

Question 8

External sector

Answer 8

UK buys imports from other countries and overseas businesses and consumers buy UK export products

Question 9

Social transfers

Answer 9

Social benefits e.g. child benefits