Income Hypothesis is mainly about observing consumers’ behavior proportional to their income. This can be divided into three main categories. Permanent Income Hypothesis (PIH) This was formulated by the economist Milton Friedman and it explains that changes in consumption behaviors are not predictable, as they are based on long-term income expectations of customers. The key conclusion is short-term changes in income have a very little effect on consumer spending behavior. In permanent income hypothesis model, [...]

Country analysis is a prerequisite for expanding operations globally and the back bone of decision making. The general economic data a company must consider before expansion can be list as below. Size of economy Income levels Income distribution Personal consumption Growth and stability patterns Population Sector analysis Inflationary trends Extent of debt Exchange rate levels and policies Banking and financial markets Comparison of similar economies Tax systems Fiscal and monetary policy situations Competition

Two major categories of international organizations can be divided organizations that having a global focus and those set up to meet the needs of particular regions. GATT (General Agreement on Tariffs and Trade) was established in 1948, initially to reduce the trade barriers among its founding members. The members of GATT created the World Trade organization (WTO) in 1995 just to improve the scope of the trade agreements. General Agreement on Trade in Services (GATS) [...]

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 [...]