National Income

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National Income is the monetary value of the total production in agriculture, industries and service sector in a country during a year. It represents the economic health and performance of an economy.

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Marshall's Definition (Production Based): 'The net production of physical (tangible) and non-physical (service) things by using natural wealth (land) with capital and labour in a country during the ye…

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National Income = Sum of income from four factors of production (Rent + Wages + Interest + Profit). National Product = Sum of total production value of final goods and services from all sectors (Agric…

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In a closed economy: 1) Families provide factors of production to firms 2) Firms pay rent, wages, interest, profit to families (money flow to families) 3) Firms produce goods/services using these fact…

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GDP is the market value of goods and services produced by citizens of a country and foreign citizens within a country's boundary during a year. Key features: 1) Considers production within geographica…

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NDP is the value obtained after deducting depreciation from GDP. During production, capital goods like machines, buildings depreciate and need replacement. Formula: NDP = GDP - Depreciation. This give…

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GNP focuses on production by citizens regardless of location, while GDP focuses on production within boundaries regardless of citizenship. GNP = GDP + Net income from foreign countries (Income from ab…

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Per Capita Income = Total National Income ÷ Total Population. It represents average income per person. Example: If national income is ₹60,000 crores and population is 2 crores, per capita income = ₹30…