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GOVT.

ENGINEERING COLLEGE, AJMER

PRESENTATION ON

NATIONAL INCOME
SUBMITTED TO: DR. SAROJ LAKHAWAT SUBMITTED BY: PALLAVI JAIN SHWETA CHOUDHARY MBA(I YEAR)

MBA, I SEM (2013-15)

CONTENT
CIRCULAR FLOW OF INCOME NATIONAL INCOME FEATURES OF NATIONAL INCOME DIFFICULTIES OF NATIONAL INCOME CONCEPTS OF NATIONAL INCOME MEASUREMENT OF NATIONAL INCOME

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CIRCULAR FLOW OF INCOME


CONSUMPTION OF GOODS AND SERVICES (DOMESTIC)

INVESTMENT

GOVT. EXPENDITURE

EXPORT

FACTOR OF PRODUCTION

BANK

GOVT

ABROAD

SAVING

TAXES

IMPORT

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NATIONAL INCOME
WHY FEATURES DIFFICULTIES

TO ESTIMATE ECONOMIC DEVELOPMENT TO KNOW HOW FAR DEVELOPMENT OBJECTIVE WERE ACHIEVED TO KNOW CONTRIBUTION OF VARIOUS SECTORS TO NATIONAL INCOME

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WHY

FEATURES

DIFFICULTIES

MACRO ECONOMIC CONCEPT FLOW CONCEPT MONETARY MEASURE UNEQUAL GROWTH RATE OF DIFFERENT SECTORS
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WHY

FEATURES

DIFFICULTIES

INCOMPLETE RECORD NON MONETIZED SECTOR LACK OF SYSTEMATIC OCCUPATIONAL CLASSIFICATION INDIFFERENCE OF PEOPLE PROBLEM OF STAFF LACKOF RELIABLE INFORMATION AND DATA ILLEGAL INCOME UNPAID SERVICES DOUBLE COUNTING PRODUCTION OF SELF CONSUMPTION
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CONCEPT OF NATIONAL INCOME

GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT NET NATIONAL PRODUCT NET NATIONAL PRODUCT AT MARKET PRICE NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME PER CAPITA INCOME

MONEY VALUE OF GOODS AND SERVICES PRODUCED WITHIN THE COUNTRY


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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT

MONEY VALUE OF GOODS & SERVICES PRODUCE IN COUNTRY + NET FOREIGN INCOME FROM ABROAD

NET NATIONAL PRODUCT


NET NATIONAL PRODUCT AT MARKET PRICE NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME

GNP = GDP+(X-M)

PER CAPITA INCOME


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X = EXPORT M = IMPORT
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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT

MONEY VALUE OF GOODS & SERVICES PRODUCED WITH IN THE COUNTRY AFTER DEDUCTING DEPRICIATION

NET NATIONAL PRODUCT


NET NATIONAL PRODUCT AT MARKET PRICE NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME PER CAPITA INCOME

NDP = GDP DEPRICIATION

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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT NET NATIONAL PRODUCT

MONEY VALUE OF GOODS & SEVICES PRODUCED IN A COUNTRY +NET FOREIGN INCOME FROM ABROAD AFTER DEDUCTING DEPRICIATION

NET NATIONAL PRODUCT AT MARKET PRICE


NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME PER CAPITA INCOME
NNP= NDP + (X M) OR NNP = GNP -DEPRICIATION

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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT

NET MONEY VALUE OF FINAL GOODS AND SERVICES EVALUATED AT MARKET PRICE IN A YEAR

NET NATIONAL PRODUCT


NET NATIONAL PRODUCT AT MARKET PRICE NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME

NNPmp=
PER CAPITA INCOME

GNPmp-DEPRICIATION

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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT NET NATIONAL PRODUCT NET NATIONAL PRODUCT AT MARKET PRICE

INCOME EARNED BY FACTOR OF PRODUCTION DEDUCTING INDIRECT TAXES AND ADDING SUBSIDIES

NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME


PER CAPITA INCOME

NNPfc = NNPmp INDIRECT TAXES + SUBSIDIES


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GROSS NATIONAL PRODUCT NET DOMESTIC PRODUCT NET NATIONAL PRODUCT

AVERAGE INCOME OF PEOPLE OF A COUNTRY IN A PARTICULAR YEAR

NET NATIONAL PRODUCT AT MARKET PRICES


NET NATIONAL PRODUCT AT FACTOR COST OR NATIONAL INCOME PER CAPITA INCOME

PER CAPITA INCOME = NATIONAL INCOME/TOTAL POPULATION

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MEASUREMENT OF NATIONAL INCOME

Computation Of National income

Income method

Product Or Value added method

Expenditure method

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INCOME METHOD
BASED ON INCOME RECEIVED BY FACTOR OF PRODUCTION

NATIONAL INCOME

= TOTAL RENT + TOTAL WAGES + TOTAL INTEREST + TOTAL PROFIT

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PRODUCTION METHOD/OUTPUT METHOD


FINAL GOOD APPROACH. BASED ON TOTAL PRODUCTION DURING A YEAR. ONLY THE FINAL VALUE OF GOODS AND SERVICES CONSIDERED FOR CALCULATION AND HENCE ALL THE INTERMEDIATED COST/EXPENDITURE ARE IGNORED.
PRODUCTION STAGE FIRM SALES RECIEPT COST OF INTERMEDIATE GOODS 0 700 VALUE ADDED

WHEAT BREAD

FARMER BAKER

500 900
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500 +200
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EXPENDITURE METHOD
BASED ON EXPENDITURE INCURRED ON GOOD AND SERVICES.

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THANK YOU

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