Managerial Economics - Macro Economics
National Income - Macro Economics
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The purpose of national income accounting is to obtain some measure of the performance of the aggregate economy.
National Income
The purpose of national income accounting is to obtain some measure of the performance of the aggregate economy. The major concepts used in the national income calculation are Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), personal income and Disposable income.
Gross Domestic Product is the total market value of all final goods and services currently produced within the domestic territory of a country in a year. It measures the market value of annual output of goods and services currently produced and counted only once to avoid double counting. It includes only final goods and services. It includes the value of goods and services produced within the domestic territory of a country by nationals and non nationals.
Gross National Product is the market value of all final goods and services produced in a year. GNP includes net factor income from abroad. GNP = GDP + Net factor income from abroad (income
received by Indian’s abroad – income paid to foreign nationals working in
India)
Net National Product at market price is the market value of all final goods and services after providing for depreciation.
NNP = GNP – Depreciation
Depreciation means fall in the value of fixed capital due to wear and tear.
NNP at factor cost is called as National Income:
National income is the sum of the wages, rent, interest and profits paid to factors for their contribution to the production of goods and services in a year.
Nnp = Nnp (Market Price) – Indirect Tax + Subsidies
Personal income (PI) is the sum of all incomes earned by all individuals / households during a given year. Certain incomes are received but not earned such as old age pension etc.,
Pi = Ni – Social Security Contribution – Corporate Income Tax – Undistributed Corporate Profits + Transfer Payments.
Disposable income is calculated by deducting the personal taxes like income tax, personal property tax from the personal income (PI).
Disposable Income = Personal Income – Personal Taxes = Consumption + Saving
Supernumerary income: the expenditure to meet necessary living costs deducted from disposable consumer income is called as supernumerary income.
The economy is divided into different sectors such as agriculture, fisheries, mining, construction, manufacturing, trade, transport, communication and other services. The gross production is found out by adding up the net values of all the production that has taken place in
The purpose of national income accounting is to obtain some measure of the performance of the aggregate economy. The major concepts used in the national income calculation are Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), personal income and Disposable income.
Gross Domestic Product is the total market value of all final goods and services currently produced within the domestic territory of a country in a year. It measures the market value of annual output of goods and services currently produced and counted only once to avoid double counting. It includes only final goods and services. It includes the value of goods and services produced within the domestic territory of a country by nationals and non nationals.
Gross National Product is the market value of all final goods and services produced in a year. GNP includes net factor income from abroad.
Net National Product at market price is the market value of all final goods and services after providing for depreciation.
NNP = GNP – Depreciation
Depreciation means fall in the value of fixed capital due to wear and tear.
NNP at factor cost is called as National Income:
National income is the sum of the wages, rent, interest and profits paid to factors for their contribution to the production of goods and services in a year.
Nnp = Nnp (Market Price) – Indirect Tax + Subsidies
Personal income (PI) is the sum of all incomes earned by all individuals / households during a given year. Certain incomes are received but not earned such as old age pension etc.,
Pi = Ni – Social Security Contribution – Corporate Income Tax – Undistributed Corporate Profits + Transfer Payments.
Disposable income is calculated by deducting the personal taxes like income tax, personal property tax from the personal income (PI).
Disposable Income = Personal Income – Personal Taxes = Consumption + Saving
Supernumerary income: the expenditure to meet necessary living costs deducted from disposable consumer income is called as supernumerary income.
The economy is divided into different sectors such as agriculture, fisheries, mining, construction, manufacturing, trade, transport, communication and other services. The gross production is found out by adding up the net values of all the production that has taken place in
Tags : Managerial Economics - Macro Economics
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