Question:

How higher national income contribute to the economic growth?

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the answer should be in general

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2 ANSWERS


  1. Economy means producing goods and services to satisfy the needs of the citizens of a country. Economic Growth means the growth of goods and services or producion in a country. When the National Income grows higher ( with the assumption that inflation rate is not increasing ) the savings of the people get higher. So likewise then investment increases. And then witht he  growth of the National Income, demand for goods and services increase and then with that the consumption of the people. To satisfy the high demand in the market, people invest savings on producing more goods and services!

    Hope this is understandable for you.


  2. Well, the more money that Oprah spends on hamburgers has a "trickle down effect" and you get more disposable income.  Get it?

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