National Income Analysis — Flashcards

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National Income is the total monetary value of all final goods and services produced in a country during a financial year. It represents the sum of incomes earned by factors of production—land, labor,…

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According to Simon Kuznets, National Income is 'the net output of commodities and services flowing during the year from the country’s productive system into the hands of the ultimate consumers.' This …

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The main factors are: 1. **Natural and human resources** – fertile land, minerals, skilled labor. 2. **Capital formation** – machinery, infrastructure. 3. **Technology** – better techniques increase o…

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GNP at Market Prices is the total market value of all final goods and services produced by normal residents of a country in a year, including net income from abroad. It includes indirect taxes and exc…

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GNP at Factor Cost = GNP at Market Prices – Indirect Taxes + Subsidies. This gives the actual income earned by factors of production before government taxes and after subsidies.

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GDP is the total value of all final goods and services produced within the domestic territory of a country during a financial year. It does not include income from abroad. Formula: GDP = GNP – Net Inc…

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NNP at Market Price = GNP at Market Prices – Depreciation. Depreciation is the wear and tear of capital goods. This gives a more accurate picture of sustainable income by accounting for capital loss.

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NNP at Factor Cost = NNP at Market Price – Indirect Taxes + Subsidies. It is also called National Income. It shows the total income actually earned by factors of production in a year.