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76 – 83
A01-A07 (3CMBA)
INRODUCTION
National income is the final outcome of all economic
activities of a nation valued in terms of money.
National income shows the economic position of a
nation .
It also will help to assess and compare the economic
progress achieved by a country over a period of
time.
JM Keynes, a famous economist defined
national income as follows:-”National income
is the money value of all goods & services
produced in a country during a year.
MEASURES OF NATIONAL
INCOME
Gross Domestic Product (GDP) is the total value of all final goods
and services produced in an economy in a one-year period.
-It is the single most-used economic measure.
Gross National Product (GNP) is the aggregate final output of
citizens and businesses of an economy in one year.
• Net domestic product (NDP) – the sum of consumption expenditures,
government expenditures, net foreign expenditures, and investment
less depreciation.
Factor services
Goods
Household e Firms
e r n m(production)
TaxesGovernment Gov nt
Sav d imn gent
ingFinancial
s marketspveens t
Im SIn
po
rts Personal consumption ports
E x
Other countries
Gross domestic
Product at market price.
-
Depreciation
National Income
NATIONAL INCOME :SOME
ACCOUNTING RELATIONSHIPS