Effect of change in personal income on GDP: As individual income increases, consumption will increase; as consumption has increased, so companies will have to produce more, and to do so, they have to invest more, so investment will grow. People will pay more taxes, so government income will increase, which will result in more government spending. If personal income decrease, then the opposite will happen consumption, investment, and government spending (assuming there are no relief packages or changes in fiscal policy) will decrease. So we can see changes in personal income will have a multi-fold effect on GDP.

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