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Variants of National Income Explained

1. There are several variants of national income that are used to measure economic activity, including Gross Domestic Product (GDP), Gross National Product (GNP), Net Domestic Product (NDP), and Net National Product (NNP). 2. GDP is the market value of final goods and services produced within a country's domestic territory in a year. GNP includes net income from abroad. NDP excludes depreciation, while NNP is the net value of final output produced by residents both domestically and abroad. 3. These variants can be measured at market prices or factor cost, and can refer to income before or after taxes and transfers to provide different perspectives on a country's economic activity

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18 views17 pages

Variants of National Income Explained

1. There are several variants of national income that are used to measure economic activity, including Gross Domestic Product (GDP), Gross National Product (GNP), Net Domestic Product (NDP), and Net National Product (NNP). 2. GDP is the market value of final goods and services produced within a country's domestic territory in a year. GNP includes net income from abroad. NDP excludes depreciation, while NNP is the net value of final output produced by residents both domestically and abroad. 3. These variants can be measured at market prices or factor cost, and can refer to income before or after taxes and transfers to provide different perspectives on a country's economic activity

Uploaded by

Jayati Bhasin
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© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

VARIANTS OF NATIONAL INCOME

GROSS DOMESTIC PRODUCT(mp)


GDP is the market value of final goods & services produced during a year within the domestic territory of a country. DOMESTIC TERRITORY It is a concept wider than the political boundaries of a country.
GDP(mp)

GNP

Net income from abroad

GROSS NATIONAL PRODUCT (mp)

GNP at market price is the market value of final goods & services produced within the domestic territory of a country during an accounting period along with net factor income earned from abroad & consumption of fixed capital.

Net factor income from abroad


Difference between factor income earned by our resident from rest of the world & factor income earned by non-resident with in our country.

GNP(mp)

GDP(mp)

Net Factor Income From abroad

Gross domestic product (fc)


It is the sum total of factor incomes(rent+interest+profit+wages) generated within the domestic territory of a country, along with consumption of fixed capital ,during a year. It includes: Compensation of employees Operating surplus Mixed income

GDP (fc)

GDP (mp)

Indirect taxes

subsidies

GROSS NATIONAL PRODUCT(fc)


GNP(fc) is the sum total of factor incomes earned by normal residents of a country along with consumption of fixed capital, during a year.

GNP

(fc)

GNP

(mp)

Indirect Taxes

Subsidies

NET DOMESTIC PRODUCT(mp)

NDP(mp) is the market value of final goods & services produced within the domestic territory of a country, exclusively of depreciation.

NDP (mp)

GDP (mp)

Deprecition

NET DOMESTIC PRODUCT(fc)

NDP(fc) is the sum total of factor income generated within the domestic territory of a country during a period of one year.

NDP (fc)

NDP (mp)

Indirect taxes

subsidies

NET NATIONAL PRODUCT(mp)

NNP(mp) is the net value of final good & services produced by the normal residents in the domestic territory & abroad in an accounting year.

NET NATIONAL PRODUCT (fc)

NNP(fc) is the sum total of factor incomes generating within the domestic territory of a country, along with net factor income from abroad during a year.

NNP (fc)

NDP (fc)

Net Factor Income From abroad

NATIONAL DISPOSABLE INCOME


It refers to the net income at the market price available to a country for disposal. Income from all the sources available to the residents of a country for saving during a year.

National disposable income = national income +net indirect taxes+net current transfers from the rest of the world

private income

Total of factor income from all the sources & current transfers from the government & rest of world accruing private sector.

Private income=factor income from NDP accruing to private sector+net factor income from abroad+int. on national Debt +current transfer from govt.+current trnsfer from rest of world

PERSONAL INCOME

The income actually received by individual & households from all resources in the form of factor income & current transfers.

Personal income

Private Income

Undistributed profits

PERSONAL DISPOSABLE INCOME

The income remaining with the individual & households after the deduction of all taxes levled against their income & property by the government.

Personal disposable income= personal income-direct personal tax miscellaneous receipts of govt. administrative department.

FACTOR INCOME FROM NET DOMESTIC PRODUCT ACCRUING TO PRIVATE SECTOR


It is that part of net domestic product at factor cost which is accrued to private sector. It excludes:

Income from property & entrepreneurship accruing to govt. departmental enterprises. Saving of non-departmental enterprises.

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