Use of National Income Data As a measurement of standard of living of people- The GNP and GDP statistics are used to measure the standard of living where a higher per capita GDP would indicate higher standard of living in a country. Per capita GDP is calculated by dividing the total GDP figure by the population of the country. Comparison level of economic activities over time- The GDP figure is used to view the development overtime and [...]

National income (Y) is defined as the total level of output of the economy. There are 03 approaches for  measuring national income and they are as follows: Output Approach Income Approach Expenditure Approach Theoretically all 03 approaches should give the same figure as the national income but in practice they may differ due to various reason. Approaches to calculating national income can be explained as follows: Output Approach This is where the output of each sector is [...]

National Income (Y) is an the total level of activity of given economy in a particular period. In other words national income measures the total level of output of an economy in a given given period of time.”Y” is commonly used as the abbreviation for national income. Normally The Gross National Product (GNP) is equals to national income and GNP is arrived from the formula mentioned below. Gross National Product (GNP) = Gross Domestic Production (GDP) + [...]

An economy owns factors of production which are used in production process. Factors of production are also known as inputs of the production process. Level of factors determines the level of output of the country which in return determines the development level and the standard of living in an economy. Apart from broad aspects of factors of production, those can be explained in simple way. Every factor of production gets rewarded for their contribution at the end [...]

Barter economy is where goods are exchanged for goods rather than using money to perform transactions. Barter economy existed in the past where there were no money was used in economies. The barter system focused on making use of specialization. As an example a farmer was specialized in farming and he produced food which resulted in “surplus” of food. The surplus of food was exchanged with another producer who made different kind of good. Even [...]