National Income
1️⃣ Meaning of National Income
National Income is the total monetary value of all final goods and services produced
within a country during one year.
It measures the economic performance of a nation.
2️⃣ Related Concepts
Term Meaning
GDP (Gross Domestic Product) Total value of final goods and services
produced within the domestic territory of
a country in one year.
GNP (Gross National Product) GDP + Income earned by residents from
abroad − Income earned by foreigners
inside the country.
NNP (Net National Product) GNP − Depreciation (wear and tear of
capital).
National Income (NI) NNP at factor cost (after adjusting taxes
and subsidies).
Per Capita Income National Income ÷ Population. Shows
average income per person.
3️⃣ Methods of Calculating National Income
There are three major methods:
A) Production (Output) Method
● Measures value of all final goods and services produced.
👉
● Formula:
National Income = Value of Output − Intermediate Consumption
1️⃣ Meaning of National Income
National Income is the total monetary value of all final goods and services produced
within a country during one year.
It measures the economic performance of a nation.
2️⃣ Related Concepts
Term Meaning
GDP (Gross Domestic Product) Total value of final goods and services
produced within the domestic territory of
a country in one year.
GNP (Gross National Product) GDP + Income earned by residents from
abroad − Income earned by foreigners
inside the country.
NNP (Net National Product) GNP − Depreciation (wear and tear of
capital).
National Income (NI) NNP at factor cost (after adjusting taxes
and subsidies).
Per Capita Income National Income ÷ Population. Shows
average income per person.
3️⃣ Methods of Calculating National Income
There are three major methods:
A) Production (Output) Method
● Measures value of all final goods and services produced.
👉
● Formula:
National Income = Value of Output − Intermediate Consumption
