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Personal, National, and Gross National Disposable Income
Personal, National, and Gross National Disposable Income are three different types of income calculated by economists to measure the savings and spending rates of households and the whole country. Personal Disposable Income is part of personal income that is available at the disposal of a household. National Disposable Income is the income that is readily…
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Private Income
Private income can be defined as the income accruing to the private sector both from domestic and international sources. Types of Private Income The private sector (Private firms Households) receives both earned income (factor income) and unearned income (transfer income). It consists of two different types of income: 1. Factor Income (Earned Income): For the private sector, there are two…
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Domestic Income and Personal Income
What is Domestic Income? Domestic Income involves the value of final goods and services produced on a domestic territory of a country. It takes into account all producers doing business within the country’s domestic boundary. A nation’s domestic income (NDPFC) is generated by both the public and private sectors. Hence, it is divided into two sections: 1.…
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National Income and Related Aggregates
National Income is the aggregate value of all goods and services produced by firms in a given financial year. It can be stated that when the aggregate revenue generated by the firms is paid out to factors of production, it equals aggregate income or National Income. There are different variants or aggregates of National Income…
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Difference between Real Flow and Money Flow
The circular flow of income is an economic model that reflects how money or income flows through the different sectors of the economy. A simple economy assumes that there exist only two sectors, i.e., Households and Firms. Households are consumers of goods and services and the owners of the factors of production (land labour, capital, and enterprise). However, the…
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Circular Flow of Income
Macroeconomics tries to study the central questions of economies. Amongst these questions, the main question is how economies create wealth. In an economy, all factors of production (FoP) undergo a production flow/cycle; in the process of which, it generates wealth in the form of making payments to the factor of production, known as factor payments. Thus, the…
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What is Net Factor Income from Abroad
It is the difference between the factor income earned by a country from abroad/rest of the world and factor income paid by a country abroad/rest of the world. Factor income from abroad is the income earned by a country’s normal residents from the rest of the world for the factor services provided by them. The…
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What is Net Indirect Tax (NIT)?
Net Indirect Tax (NIT) refers to the difference between indirect taxes and subsidies. Indirect Taxes are the taxes imposed on the production and sale of goods and services by the Government of a country, for example, GST (Goods and Services Tax). An indirect tax imposed on a good or service results in an increase in its price in the market. For…
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Final Goods and Intermediate Goods
Macroeconomics is a part of economics that focuses on how a general economy, the market, or different systems that operate on a large scale, behaves. Macroeconomics concentrates on phenomena like inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment. “Macroeconomics is that part of economics which studies…
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Consumption Goods and Capital Goods
Macroeconomics is a part of economics that focuses on how a general economy, the market, or different systems that operate on a large scale, behaves. Macroeconomics concentrates on phenomena like inflation, price levels, rate of economic growth, national income, gross domestic product (GDP), and changes in unemployment. “Macroeconomics is that part of economics which studies…