Thursday, January 1, 2015

Measures of National Income

GDP - Gross domestic Product

Sum of money value of all final goods and services produced within the domestic territories of a country during an accounting year.

GDP = Factor Cost + Market Price

GNP - Gross National Product

It is the aggregate final output of citizen and business of an economy in a year

GNP = GDP+NFIA(Net Factor Income From Abroad)

NFIA = Income Received from abroad for rendering factor services - Income paid towards services rendered by foreign nationals in the domestic territory

NDP & NNP

Net Domestic  & Net National Product

NDP = GDP - Depreciation
NNP = GNP - Depreciation

Depreciation is the reduction in value due to wear & tear

National Income  = NNP at the factor Cost


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