Macroeconomics
fromwork,interestfrominvestments,rentfromproperty,andproftsfrombusinesses.Personal income showcases the earnings that individuals bring in. ● Disposable Personal Income (DPI): Disposable personal income is the money individuals have at their disposal after paying their income taxes . It's the actual amount of money available for spending or saving after taxes have been subtracted from their earnings. Nationalincomeaccountsprovideawaytounderstandhowwealthisdistributedamongdifferentgroups in society. By analyzing national income, we can assess whether income distribution is equitable or whether certain groups receive a larger share of the income. Personalincomeanddisposablepersonalincomehelppolicymakersevaluatethefnancialwell-beingof individuals. Governments use this information to design tax policies and social programs that can influence disposable income levels and overall economic stability. These measures are crucial indicators of an economy's health. When national income, personal income, and disposable personal income rise, it generally indicates a growing economy where people are earning more . On the other hand, stagnant or declining fgures could signal economic challenges. By studying these nationalincomeconcepts,wegaininsightsintohowmoneymovesbetweenvarious economicagents,howpeople'searningsarestructured,andhowmuchtheytrulygettokeepaftertaxes. This understanding aids in making informed economic decisions and assessing the well-being of a nation's citizens. C. Infation Measurement and Adjustment Inflation is another macroeconomic indicator of economic performance . Economists measure and analyze the level of prices in an economyregularly. Inflation isdefnedas asustainedincrease inan economy’s overallpricelevel overaspecifcperiod(usuallyayear).Forexample,aninflationrateof5% means that, on average, prices are 5% higher than in the previous period. When the pricelevel,also referred to as the general price level, increases,each unit of money will buy less. Moderateinflationisconsiderednormalandmayevenbebenefcialforaneconomyasitcanencourage spending and investment. However, high rates ofinflationcanbeharmful, erodingpurchasingpower and causing economic instability . Degrees of Infation
Theinflationraterepresents thepercentagechangein the price level .Theextentoftheincreaseordecrease in this rate determines the degree of inflation. ● Hyperinflation: This is a very high rate of inflation (usually > 50% a month) whereby prices increase rapidly, sometimes at an
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