CIMA BA1 Syllabus A. Macroeconomic And Institutional Context Of Business - National Income - Notes 2 / 17
National Income
is basically total Income earned.
In other words, the value of goods and services produced in a year.
In the Exam!
The terms National Income, GDP and GNP are used interchangeably.
Growth in National Income
National Income can increase due to:
An increase in Aggregate Demand (AD) - the Demand curve moves to the right
An increase in Aggregate Supply (AS) - the Supply curve moves to the right
How can AD be increased?
Increase in government spending/investment
Increase in investment
Increase in exports
How can AS be increased?
Increased investment in technology
Improvements in training
Increased incentive for firms to employ workers
Decrease in costs of goods to supply