National income, also called net national product, is a measure of the total monetary value of all goods and services produced in a country over a period of time. It is made up of wages, interest, rent, profits, and net income from abroad. Gross domestic product and gross national product are also used to measure national output, with GDP measuring domestic production and GNP including income generated by citizens abroad. When calculating these measures of national income, nonproductive transactions like financial or secondary sales are excluded.

1. Measuring National Output and
Income

2. What is National Income?
• National income (a.k.a net national product)
- a measure of the money value of the
total flow of goods and services produced in
an economy over a specified period of time.

3. National Income consist the ff.:
• Wages or Salary – those generated by labor
• Interest – those generated by lenders of labor
• Rent – those generated by owners of real
estate
• Profit – those generated by the entrepreneurs
• Net Factor – income from abroad.

4. Important terms used in measuring
National income
• Gross Domestic Product (GDP)
- it is a measure of the total flow of goods and
services produced by the economy over a
particular time period.
• Gross National Product (GNP)
– It is a measure of the market value of the final
goods and services produced by nationals or
citizens of a country in a particular time period.

5. • Exclusion from the GNP. the GNP is a measure
of the total production of the economy for a
specified year. It follows, therefore, that the
nonproductive transactions must be excluded.
Nonproductive transactions consists of the
following:
1. purely financial transactions
2. secondhand sales

6. Purely financial transactions consists of the
following:
1. public transfer