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Wednesday, July 24, 2013

PPT On Measuring National Income

Measuring National Income Presentation

Measuring National Income Presentation Transcript:
1.Measuring National Income

2.Circular flow of income

3.What is national income?
The labour and capital of country acting on its natural resources produce annually a certain net aggregate of commodities material an immaterial including services of all kinds-Marshall
national income is the monetary measure of- ·         The net value of all products and services ·          In an economy during a year ·         Counted without duplication ·         After allowing for depreciation ·         Both in the public and private sector of products and services ·         In consumption and capital goods sector ·         The net gains from international transactions.

4.What is gross national product (G.N.P.)?
It is the basic measure of a nation’s output stated in terms of money representing the total value of a nation’s annual output
It is evaluated in terms of market prices.
G.N.P. is defined as the money value of the national production for any given period. Here we take into account: ·         The money value of the final goods and services produced in the economy to avoid double counting. Intermediate products are excluded from it.  ·          The money value of only currently produced goods and services as G.N.P. is a measure of the economy’s productivity during the year

5.What is net national product (N.N.P.)?
It refers to the net production of goods and services in a country during the year. It is G.N.P. less depreciation during the year. N.N.P. = G.N.P. - depreciation for the given year

6.What is national income at factor cost (N.I.FC)?
It is the total of all incomes earned by the owner of factors of production for their contribution of factors of production. 
N.I.FC= N.N.P. - indirect taxes+ subsidies

7.What is personal income (P.I.)?
This is the actual income received by the individuals and households in the country from all sources.
It denotes aggregate money payments received by the people by way of wage, interest, profits, and rents.
 It is the spendable income at current prices available to individuals.

P.I. = N.I. – corporate taxes – undistributed corporate profits – social security contributions + transfer payments

8.What is disposable personal income (D.P.I.)?
The whole of personal income is not available for consumption as personal direct taxes have to be paid. What is left after payment of personal direct taxes is call disposable personal income. D.P.I = P.I. – personal taxes, property taxes and insurance payments
D.P.I. = consumption + savings

9.Nominal and Real GDP
Nominal GDP measures the value of goods and services produced at current prices

Real GDP measures the value of goods and services produced expressed in some base year.

10.Methods for measuring National income
Product Method
Income Method
Expenditure Method

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