What national income measures
National income measures the total value of everything an economy produces, earns, or spends in a given period. Economists use it to judge how well a country's economy is performing.
Formula
National Income (Y) = C + I + G + (X − M)
Real World
The UK's Office for National Statistics reported GDP of approximately £2.5 trillion in 2023, capturing every haircut, car sold, and government service provided — all three approaches (output, income, expenditure) converged on the same figure.
Exam Focus
State which approach you are using (output/income/expenditure) before explaining; examiners award marks for identifying the method.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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