News Concepts Of National Income - Gdp, Gnp, Nnp, Ni, Pi, Di Too Pci
There are diverse concepts of National Income. The mind concepts of NI are: GDP, GNP, NNP, NI, PI, DI, too PCI. These dissimilar concepts explicate almost the phenomenon of economical activities of the diverse sectors of the diverse sectors of the economy.
Gross Domestic Product (GDP)
The most of import concept of national income is Gross Domestic Product. Gross domestic production is the coin value of all lastly goods too services produced inside the domestic territory of a dry reason during a year.
Algebraic aspect nether production method is,
GDP=(P*Q)
where,
GDP=Gross Domestic Product
P=Price of goods too service
Q=Quantity of goods too service
denotes the plus of all values.
According to expenditure approach, gross domestic product is the amount of consumption, investment, regime expenditure, internet unusual exports of a dry reason during a year.
Algebraic aspect nether expenditure approach is,
GDP=C I G (X-M)
Where,
C=Consumption
I=Investment
G=Government expenditure
(X-M)=Export minus import
GDP includes the next types of lastly goods too services. They are:
• Consumer goods too services.
• Gross private domestic investment inward working capital missive of the alphabet goods.
• Government expenditure.
• Exports too imports.
Gross National Product (GNP)
Gross National Product is the full marketplace value of all lastly goods too services produced annually inward a dry reason plus internet element income from abroad. Thus, GNP is the full stair out of the menses of goods too services at marketplace value resulting from electrical current production during a twelvemonth inward a dry reason including internet element income from abroad. The GNP tin sack live expressed every bit the next equation:
GNP=GDP NFIA (Net Factor Income from Abroad)
or, GNP=C I G (X-M) NFIA
Hence, GNP includes the following:
• Consumer goods too services.
• Gross private domestic investment inward working capital missive of the alphabet goods.
• Government expenditure.
• Net exports (exports-imports).
• Net element income from abroad.
Net National Product (NNP)
Net National Product is the marketplace value of all lastly goods too services afterwards allowing for depreciation. It is too called National Income at marketplace price. When charges for depreciation are deducted from the gross national product, nosotros teach it. Thus,
NNP=GNP-Depreciation
or, NNP=C I G (X-M) NFIA-Depreciation
National Income (NI)
National Income is too known every bit National Income at element cost. National income at element cost way the amount of all incomes earned yesteryear resources suppliers for their contribution of land, labor, working capital missive of the alphabet too organizational might which teach into the years internet production. Hence, the amount of the income received yesteryear factors of production inward the kind of rent, wages, involvement too turn a profit is called National Income. Symbolically,
NI=NNP Subsidies-Interest Taxes
or,GNP-Depreciation Subsidies-Indirect Taxes
or,NI=C G I (X-M) NFIA-Depreciation-Indirect Taxes Subsidies
Personal Income (PI)
Personal Income i s the full coin income received yesteryear individuals too households of a dry reason from all possible sources earlier straight taxes. Therefore, personal income tin sack live expressed every bit follows:
PI=NI-Corporate Income Taxes-Undistributed Corporate Profits-Social Security Contribution Transfer Payments
Disposable Income (DI)
The income left afterwards the payment of straight taxes from personal income is called Disposable Income. Disposable income way actual income which tin sack live spent on consumption yesteryear individuals too families. Thus, it tin sack live expressed as:
DI=PI-Direct Taxes
From consumption approach,
DI=Consumption Expenditure Savings
Per Capita Income (PCI)
Per Capita Income of a dry reason is derived yesteryear dividing the national income of the dry reason yesteryear the full population of a country. Thus,
PCI=Total National Income/Total National Population