National Income 2.4.1

Question 1

wealth

Answer 1

stock of assets. when people own things such as houses possession

Question 1

national income

Answer 1

national income is the flow of money, movement of money from one person to another, rather than stock of money such as savings in a bank

Question 2

income

Answer 2

income is the flow of money and the money they receive eg. money from work, interest from savings.

Question 3

chain of analysis of how the households take part in the circular flow of income

Answer 3

• households own all wealth and resource’s so they provide the firms with CELL in return for rent, wages, interest and profits
• they use this money to buy goods and services by the firms

Question 4

three ways of measuring economic activity

Answer 4

• National output: the value of goods and services from firms to households
• National expenditure: the value of spending by households on goods and services.
• National income: income paid by firms to households in return for CELL.