National income

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National income
National income refers to the market value

of the goods & services produced by an economy during the period of one year without duplication. final goods & services produced in a country during a period of one year.

National income is the money value of all

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 National income is the part of macro

economy.

Micro economy: is the study of economy as

the whole. The study of economy as the whole is carried out by analyzing the behavior of the interactions between macroeconomic variables including national output(GDP & GNP),aggregate consumption, savings & investments, price level & economic transactions with the rest of the world.
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Methods of measuring national income

Product or value added method or net

output method

Income method Expenditure method & commodity flow

method.

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Importance of measuring national income

It helps us to estimate the level of

economic development of the nation.

it is used in computing per capital income. it is used for analyzing various phases of

business cycles.

it is used for framing various policies by

the government.
it helps in comparing economic growth of

our country with the other nations.

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Difficulties in measuring national income

lack of distinct difference of economic

activities.

black money. inter regional differences. conceptual problems. mass illiteracy. Non availability of data about certain

incomes.
difficulties of sample techniques.
4/28/12 lack of skilled personnel to collect data &

Measures of national income

GNP(gross national product): is defined as

value of all final goods & services produced in one year plus income earned abroad by the nationals minus income earned locally by foreigners. earned abroad by the nationals plus income earned locally by the foreigners from the total value of domestically produced goods & services. measure of the net output available for the 4/28/12 consumption by the society(including

GDP(gross domestic product): it is income

NNP(net national product):gives the