Question

Does increase in per capital Income affect National Income & Describe.

Answer 1

Aggregation of per capita Income form the National Income. The higher the per capita income, the higher the national income increases in the same proportion. In order to increase the national income, the government try to increase the personal income, through the programs the government increases the personal income. This increases the capacity of the individuals. Increase in per capita Income will accelerate the pace of economic development. If there is a decrease in economic growth or national income, the per capita income will definitely decrease. Thus, an increase in per capita income leads to an increase in national income. Thus there is a proportional relationship between the two.