PGP Group-2

 National Income is defined as sum total of the

goods and services produced in a country, in a
particular period of time.
 GDP
 GNP
 NNP
 PI
 DI
 GDP is the market value final goods and
services produced within the domestic territory
of a country during a period.
Component of GDP
 Wages and Salaries
 Rent
 Interest
 Dividends
 Undistributed profit
 Mixed Income
 Direct Taxes
GDP at market price is estimated by deducting
the value of intermediate consumption from
the value of output produced by all the
producers within the domestic territory of a
country.

Value of output
produced by all Value of
producing units intermediate = GDP at Market
within the - consumption Price
domestic
territory
 GNP at market price is sum total of all the
goods and services produced in a country
during a year and net income from abroad.

Gross Domestic Net Factor

Product at + Income from = Gross National
Market Price Abroad Income
 Consumer goods and Services
 Gross private domestic income
 Goods and services produces by government
 Net Income From Abroad
 Income Approach
 Expenditure Approach
 Product Approach
GNP at Market Price

GNP at Total
Market = Output Market
Price Produced * Price
in a year

GNP at Factor Cost

GNP at Net
GNP at FC = Market - Indirect + Subsidies
Price Taxes
Net National Income

GNP - Depreciation = NNP

NNP at Market Price

GNP at - Depreciation = NNP at Market

Market Price Price
Personal Income- The income actually received
by persons from all the form of current transfer
payment and factor income.
Undistributed
PI = Private Income + Corporate Profit - Direct Taxes

Private Income- The total income from all the

sources and current transfers from govt. and rest
the world accruing to private sector.
The income remaining with individuals after
deduction of all taxes levied against and their
property by the government.

Miscellaneous
DI = Personal Income - Direct Taxes - receipt the
government
 Inflation- It is the rate at which the general
level of prices for goods and services is rising
and consequently the purchasing power of
currency is falling

 CPI-Consumer Price Index measures changes

in the price level of market basket of consumer
goods and services purchased by households.

 WPI-Wholesale Price Index is the price of

representative basket of wholesale goods.
 Fiscal Policy- Fiscal policy is the use of
government revenue collection and
expenditure to influence the economy

 Monetary Policy- Monetary policy is the

macroeconomic policy laid down by the central
bank . It involves management of money
supply and interest rate and is the demand side
economic policy used by govt. of a country to
achieve macroeconomic objective like inflation,
consumption, growth and liquidity.
 Due to increase in crude oil price and
weakening of Rupees value against Dollar,
price of petrol and diesel has gone all time high
 GOI has announced reduction of 2.5 Rupees
per ltr. on petrol and diesel.
 This price reduction involved reduction of Rs
1.5 per ltr. In excise duty and 1 Rupee beared
by State owned oil Companies like IOCL,
HPCL, BPCL
 Low price of oil increase demand of other
goods.
 It will help in keeping goods prices less volatile
 Transportation cost will reduce
 Primary-Agriculture, fisheries, mining, forestry
 Secondary-Manufacturing, Construction,
Electricity
 Tertiary-Communication, Transport, Banking