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NATIONAL INCOME AND NET DOMESTIC PRODUCT: National income (NI) is the total income earned by the citizens of the national economy resulting from their ownership of resources used in the production of final goods and services during a given period of time, usually one year. Net domestic product (NDP) is the total market value of all final goods and services produced within the political boundaries of an economy during a given period of time, usually a year, after adjusting for the depreciation of capital. Although national income is generated by the production of net domestic product, the value of production does not entirely result in earned income. In other words, national income can be derived from net domestic product after a few adjustments.
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Lesson 17: Money | Unit 5: Scarcity
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Page: 24 of 25
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The key to money is control, that is, monetary policy. Money is not the root of evil, but it can cause problems: - Too much money, can cause inflation.
- Too little money, can cause a recession.
Therefore: - Government is given regulatory responsibility over money. We don't let people print their own money.
However: - Government leaders could also use money control for personal reasons.
- Ideologies play an important role.
The bottom line: - Money must be controlled. When they control money they achieve some goals and prevent others.
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DEMAND-PULL INFLATION Inflation that results from increases in aggregate demand that exceed any increases in aggregate supply. This type of inflation results when the four macroeconomic sectors (household, business, government, and foreign) collectively try to purchase more output than the economy is capable of producing. The alternative type of inflation is cost-push inflation.
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
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"Man is born to live, not to prepare for life. " -- Boris Pasternak, writer
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NORC
National Opinion Research Center
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