Income and its Measurements:
The term 'Macro' is derived from the Greek word 'Uakpo' which
means large. Macro economics looks at the economy as a whole.
There are various concepts of national income. These are
explained below one by one:
There are three methods of measuring national income of a country. They yield
the same result. These methods are:
A simple circular flow model of the
macro economics containing two sectors (business and household)
and two markets (product and factor) that illustrates the
continuous movement of the payments for goods and services
between producers and consumers.
According to Kuznets, the measurement of national income is a complicated problem and is beset with the following difficulties.
There are many determinants or factors which influence the size of the national income. They, in brief, are as follows:
Gross Domestic product (GDP) is generally considered a best single measure of
the value of output produced in the economy. The importance of GDP as a measure
of good standard of living or welfare is as under:
The gross domestic product (GDP) is the total market value of all
the final goods and services produced within an economy in a