NATIONAL INCOME AND RELATED AGGREGATES

Gross Domestic Product at Market Price (GDPMP)

Gross Domestic Product at Factor Cost(GDPFC)

Net Domestic Product at Market Cost(NDPMP)

Net Domestic Product at Factor Cost(NDPFC or Domestic Income)

Gross National Product at Market Price(GNPMP)

Gross National Product at Factor Price(GNPFC)

Net National Product at Market Price(NNPMP)

Net National Product at Factor Cost(NNPFC or National Income)

Gross Net ( - Depreciation )

Net Gross (+ Depreciation)

Domestic National (+ NFIA)

National Domestic (-NFIA)

Market Price Factor Cost (-NIT)

Factor Cost Market Price (+NIT)

NIT(Net indirect Tax)=Indirect Taxes-Subsidies

NFIA(Net Factor Income from Abroad)=FIFA(Factor Income from Abroad)-FIPA(Factor Income Paid Abroad)

Ways to measure National Income:

1. Value added

2. Income Method

3. Expenditure Method

1. Value added=Value of Output-Intermediate Consumption

Calculating Value of Output

1.when the entire product is sold in the accounting year

Value of output =Sales+Production for self consumption

2.When the entire output is not sold in the accounting year

Value of output=Sales+change in stock(Closing stock-Opening stock)+Production for self consumption

3. Value of Output=(Quantity x Price)+Change in Stock

2. Income Method

NDPFC=Compensation of employees+Operating Surplus +Mixed Income of Self-Employed+Pro t

(wages+salaries in cash+ (Rent+Royalty+ (corporate tax+

wages+salaries in kind + Interest+Pro t) Dividend+

Employer’s contribution Retained Earning)

To social security scheme )

3. Expenditure Method

GDPMP=Private Final Government Final Gross Domestic Capital

Consumption + Consumption + Formation + Net exports

Expenditure Expenditure

Private Final Consumption Expenditure:

Household Final Consumption expenditure+Private Non-pro t Institution+Serving Households

Final Consumption Expenditure

Gross Domestic Capital Formation

Gross Fixed Capital Formation + Inventory Investment

(Net Fixed Capital Formation

Depreciation)
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