National income is the total value of goods and services produced by a country during a financial year, and it is valued in terms of money. The basic concepts of national income include:
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Gross Domestic Product (GDP): This is the total market value of all final goods and services produced within the domestic territory of a country in a year.
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Gross National Product (GNP): This is the total market value of all final goods and services produced by a countrys residents, regardless of their location, in a year.
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Net National Product (NNP) at Market Prices: This is the GNP minus depreciation.
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Net National Product (NNP) at Factor Cost or National Income: This is the sum of the income received by factors of production in the form of rent, wages, interest, and profit.
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Personal Income: This is the sum of all incomes actually received by all individuals or households during a given year.
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Disposable Income: This is the income that households have available for spending or saving after taxes have been paid.
There are various methods of calculating national income, including the expenditure method, income method, and production method. National income accounting is a government bookkeeping system that measures a countrys economic activity and provides insight into how an economy is performing. The information collected through national income accounting can be used for a variety of purposes, such as assessing the current standard of living or the distribution of income within a population.
