NATIONAL INCOMEmoney value of final outputs whichcomprises of goods and servicesproduced by a country during a year.
GDP & GNPGDP = Gross Domestic Product, is thevalue of all final goods and servicesproduced by all sectors of the economythe citizens or foreign sectors within acountry.GNP = Gross National Product, is thevalue of all final goods and servicesproduced by all citizens of a country(within a country or abroad).
METHODS OF MEASURINGNATIONAL INCOMENI can be measured using 3 common method:a) Income methodb) Output methodc) Expenditure methodIrrespective of which approach used in calculating NI,will give us the same value
I) INCOME METHOD• National Income is the total money values of allincomes received by productive persons andenterprises in the country during the year.• It is the total income of all factors of productionincluding the income of self-employed person,labourers, capital and land .NI= wages+rents+ profits+ interest of capital.
II) OUTPUT METHOD1. Also known as value added method.2. 3 stages:• estimating gross value of domestic o/p• determining material cost• deducting these cost from gross value
III) EXPENDITUREMETHOD2 approaches used here:a) Sum of all the money expenditures at marketprice.b) Sum of value of all the products finallydisposed off.
MEASUREMENT OF NATIONAL INCOME ININDIA• Input method is used for servicesectors• Output method is used forcommodity producing sectors• National in come divided into 15sectors