Understanding National Income Components

What are the main components of national income?

• Wages, profits, rents, and interest

• Exports, imports, savings, and loans

• The main components of national income are consumption, investment, government spending, and net exports.

• Labor, capital, land, and entrepreneurship

How does consumption affect national income?

• Consumption positively affects national income by driving demand and production.

• Consumption decreases overall demand in the economy.

• Higher consumption leads to lower production levels.

• Consumption has no impact on national income.

What role does investment play in national income?

• Investment plays a crucial role in increasing national income by enhancing productive capacity and generating economic growth.

• Investment has no impact on national income.

• Investment decreases national income by diverting resources.

• Investment only affects individual wealth, not national income.

Can you name the factors that contribute to government spending in national income?

• Inflation rates

• Economic conditions, fiscal policy, public demand, political priorities, demographic changes

• Stock market performance

• Interest rates

How does net exports influence the calculation of national income?

• Net exports have no impact on national income calculations.

• Net exports influence national income by affecting the total economic output; positive net exports increase national income, while negative net exports decrease it.

• Only imports affect national income, not net exports.

• Net exports only influence consumer spending, not national income.