WAEC - Economics (2014 - No. 26)

Which of the following will increase the nominal value of national income?
High rate of inflation
increase in the value of money
Increase in import
High rate of subsistence production

Explanation

'Nominal' value of national income can be found by multiplying the quantity of output by the retail (market) price of this output. INcrease in the level of production, will increase the norminal value of national income which is the monetary value of outputs. But If demand increases at an unsustainable rate, resources become increasingly scarce, and firms will raise prices.

Comments (0)

Advertisement