Theory question 111
National IncomeSection B (answer four questions only from this section)
(a) Distinguish between personal income and national income.
(b) Describe any four uses of national income data.
Show the model answer
(a) Personal income is the total income actually received by individuals/households from all sources, including transfer payments, before personal taxes. National income is the total money value of all goods and services produced in a country in a year (plus net income from abroad), less depreciation.
(b) Any four: measuring standard of living (per capita income); comparing living standards between countries; measuring economic growth over time; economic planning and policy making; showing the contribution of each sector; guiding income distribution and tax policy; helping international organisations fix contributions and aid; guiding investors.
Four uses, each explained.