What is National Income?
National Income is the sum that is total money value of all the goods and services produced in one accounting year.
So when we talk about goods and services we are only talking about the final goods and services and not the semi processed, when we take the money value of all the goods and services produced within the domestic boundary on India only and to not other countries. CONCEPTS OF NATIONAL INCOME IN TERMS OF MARKET PRICE:-
1) Gross Domestic Product:- It is the money value of final goods and services produced within the country, say it is the rupee value of final goods and services which does not include any second hand goods, depreciation value of any goods and also goods and services from abroad. [Gross Domestic Product at Market Price = value of gross domestic output - value of intermediate consumption]
2) Gross National Product:- In short GNP is GDP plus net factor incomes earned from abroad. Here let us see what is net factor income or net foreign factor income with a example:-
(Formally NFFI actually means the income of a business or even a nation which represents the difference between payments received from the foreign sector by citizens and payments made to foreigners who may be employed to make a good or provide a service domestically. This number is the difference between the gross domestic product and the gross national product.)
3) Net Domestic Product:- Net domestic product at market price is the difference been GNP at market price minus depreciation and net factor incomes from abroad. [Net Domestic Product at Market Price = GNP at MP - Depreciation - Net factors income form abroad] 4) Net National Product:- Net National product measures the net money value of final goods and services at current prices produced in a year in a country. It is the gross national product at market price less depreciation. In production of output capital assets are constantly used up. Here the wear...
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