There are several concepts used to measure national income, including GDP, GNP, NNP, NI, PI, DI, and PCI. GDP is the total value of goods and services produced within a country's borders in a period of time. GNP includes the output of citizens living abroad. NNP deducts depreciation from GNP. NI measures income received by factors of production. PI is total individual income before taxes. DI is individual income after taxes available for spending. PCI divides total national income by population. These concepts are used to understand and measure the economic activity of a country.
There are several concepts used to measure national income, including GDP, GNP, NNP, NI, PI, DI, and PCI. GDP is the total value of goods and services produced within a country's borders in a period of time. GNP includes the output of citizens living abroad. NNP deducts depreciation from GNP. NI measures income received by factors of production. PI is total individual income before taxes. DI is individual income after taxes available for spending. PCI divides total national income by population. These concepts are used to understand and measure the economic activity of a country.
There are several concepts used to measure national income, including GDP, GNP, NNP, NI, PI, DI, and PCI. GDP is the total value of goods and services produced within a country's borders in a period of time. GNP includes the output of citizens living abroad. NNP deducts depreciation from GNP. NI measures income received by factors of production. PI is total individual income before taxes. DI is individual income after taxes available for spending. PCI divides total national income by population. These concepts are used to understand and measure the economic activity of a country.
There are several concepts used to measure national income, including GDP, GNP, NNP, NI, PI, DI, and PCI. GDP is the total value of goods and services produced within a country's borders in a period of time. GNP includes the output of citizens living abroad. NNP deducts depreciation from GNP. NI measures income received by factors of production. PI is total individual income before taxes. DI is individual income after taxes available for spending. PCI divides total national income by population. These concepts are used to understand and measure the economic activity of a country.
INCOME by Monday .C. Desmond Concept of National Income • There are varying concepts of National Income. The major concepts of National income are: GDP, GNP, NNP, NI, PI, DI, and PCI. These varying concepts explain about the phenomenon of economic activities of the various sectors (primary, secondary & tertiary) of the economy. GROSS DOMESTIC PRODUCT (GDP) • It is the monetary & market value of final goods & services produced within the geographical boundary of a country irrespective of their nationality over a given period of time. Take Nigeria from example, there are several persons (usa, france,germany, togo,ghana etc) living in Nigeria, so far they are living in Nigeria & producing in Nigeria, their output counts are part of Nigeria's GDP. • It is mathematically expressed as PXQ, where p is the price & Q the output. Accorging to the expenditure approach, GDP=C+I+G+(X-M) GROSS NATIONAL PRODUCT (GNP) • It is the monetary & market value of final goods & services produced by nationals of a country irrespective of where they reside over a given period of time. That is, where ever nigerian are residing in any country & are producing or earning their income, their income or profit counts as Nigeria's GNP. • GNP= GDP+Net Factor Income From Abroad (NFIA), when NFIA is income earned from Nigerian residing abroad minus income from non Nigerian residing in Nigeria. Net National Product (NNP) • It is the market value of all final goods and services after allowing for depreciation/ capital consumption allowance/ consumption of fixed capital. It is also called National Income at market price. When charges for depreciation are deducted from the gross national product, we arrived at NNP • NNP is written in algebraic terms as GNP- Depreciation or NNP=C+I+G+(X-M)+NFIA- Depreciation National Income (NI) • National Income is also known as National Income at factor cost. National income at factor cost is the sum of all incomes accrued to resources suppliers for their contribution of land, labor, capital and entrepreneur which go into the years net production. Hence, the sum of the income received by factors of production in the form of rent, wages, interest and profit is called National Income. • NI algebraic term is denoted as NNP+Subsidies-Indirect Business tax or C+I+G+(X-M)+NFIA- Depreciation+Sunsidies-Indirect Business tax. Personal Income (PI) • It is the total money income received by individuals and households of a country from all possible sources before the deduction of direct tax. • It's algebraic term can be written as PI=NI-Company Income Taxes-Undistributed Profits of companies- Social Security Contribution+Transfer Payments Disposable Income (DPI or Ydp) • It is the income left for an individual/household to spend after the deduction of personal direct tax. Disposable income means actual income which can be spent on consumption by individuals. • It's algebraic term is written as DPI=PI-PIT, where PIT is personal Income tax. According to the consumption approach, it is written as DPI=Consumption+Savings. Per Capita Income (PCI) • It is the Income per head of nationals of a country. It is derived by dividing the national income of the country by the total population of a country. • It's algebraic term is written as NI/population NOTE • Market prices: These are the prices that are paid for goods and services. These prices are • • affected mainly by indirect taxes and subsidies. These effects do not make market prices to • • reflect the through factor cost of goods and services. Indirect taxes imposed on goods make • • their prices to be higher than they should have been. Conversely, subsidies paid to • • producers will make market prices lower than they should have been. Simply market prices • • do not show the true factor cost of production.
• Factor Cost: This is also referred to as the net price. The factor cost is the market price of a • • product minus indirect taxes plus subsidies_x0000_ THANK YOU
