‘National Income is a measure of the total money value of goods and services produced by an economy over a period of time, normally a year’. Commonly National Income is called as Gross National Product(GNP) or National Dividend.
Various terms associated with measuring of National Income
Gross National Product is the total value of goods and services produced and income received in a year by domestic residents of a country. It includes profits earned from capital invested abroad.
C = Consumption
I = Investment
G = Government Expenditure
X-M = Export – Import
NFIA = Net Factor Income from Abroad)
Gross Domestic Product (GDP) is the total value of output of goods and services produced by the factors of production within the geographical boundaries of the country.
Net National Product(NNP) is arrived by making some adjustment with regard to depreciation that is we arrive the Net National Product (NNP) by deducting the value of depreciation from Gross National Product.
(NNP = GNP − Depreciation)
Net Domestic Product (NDP) is a part of Gross Domestic Product, Net Domestic Product is obtained from the Gross Domestic Product by deducting the Quantum of tear and wear expenses (depreciation)
NDP = GDP − Depreciation
Per capita Income or output per person is an indicator to show the living standard of people in a country. It is obtained by dividing the National Income by the population of a country.
Per capita Income = National Income / Population
In 1867-68 for the first time Dadabhai Navroji had ascertained the Per Capital Income in his book “Poverty and Un-British Rule of India”.
Personal income is the total money income received by individuals and households of a country from all possible sources before direct taxes.
Disposable income means actual income which can be spent on consumption by individuals and families, thus, it can be expressed as DPI = PI − Direct Taxes
(From consumption approach DI = Consumption Expenditures + Savings )