Friday, 8 November 2019

Unit 13: Basic National Income Concepts


                                            Unit 13: Basic National Income Concepts    

National income is the aggregate of money value of the annual flow of final goods and services in the national economy during a given period.

GNP is the value of all final goods and services produced by domestically owned factors of production within a given period.

The production units, which produce goods and

services, distribute money incomes to all who help in production in the form of wages, Notes rent, interest and profit, is known as Gross National Income.

National produce differs from domestic product by the amount of net factor income from abroad.

The valuation of the national product at market prices indicates the total amount actually paid by the final buyers while the valuation of national product at factor cost is a measure of the total amount earned by the factors of production.

Personal income is calculated by subtracting from national income those types of incomes which are earned but not received and adding those types which are received but not currently earned.

Disposable income: The amount of income left to an individual after taxes have been paid, available for spending and saving.

Gross domestic product: The money value of all final goods and a service produced by normal residents as well as non-residents in the domestic territory of a country but does not include net factor income earned from abroad.

Gross national product: Total market value of all finished goods & services produced in a year by a country's residents  National income: National income is a measure of the total value of the goods and services (output) produced by an economy over a period of time (normally a year).

Nominal GDP: It is calculated by using the current prices to place value on the economy's production of goods and services.

Personal income: Income received by persons from all sources.

It includes income received from participation in production as well as from government and business transfer payments  Real GDP: It is calculated by evaluating current production using prices that are fixed at past levels, it shows the economy's overall production which changes over time.

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