Economics - National Income - 2400 Words

ECONOMICS TITLE : NATIONAL INCOME TEAM MEMBERS : SARAH CHIN, ARDEN, NURUL NADYRAH FIR DAUS LECTURER : MR.MANO TABLE OF CONTENT 1. INTRODUCTION TO NATIONAL INCOME 3, 4 2. BACKGROUND OF NATIONAL INCOME 5, 6 3. THE MEASUREMENT OF NATIONAL INCOME 7, 8 4. THE PROBLEMS IN MEASURING NATIONAL INCOME 9, 5. PROBLEMS OF COMPARISON OF NATIONAL INCOME BETWEEN 10 COUNTRIES 6. CONCLUSION 11 7. REFERENCES 12 INTRODUCTION National Income or national product or national expenditure is the total value of all goods or services produced or created by a nation†¦show more content†¦Therefore GNP, rather than NNP, is used to make comparisons over time and between countries. Net National Product Net national product (NNP) is obtained when the value of depreciation is subtracted from the GNP. Depreciation occurs when capital equipment use in the production process becomes obsolete after a certain period of usage. NNP = GNP – depreciation NNP can also be measured at market prices or at factor prices. The formula to calculate NNP at market price is: NNP (market price) = GNP (market price) – depreciation NNP (market price) = NNP (factor cost) + indirect taxes – subsidies The formula to calculate NNP at factor cost is: NNP (factor cost) = GNP (factor cost) – depreciation NNP (factor cost) = NNP (market price) + subsidies – indirect taxes BACKGROUND OF NATIONAL INCOME National income is gross domestic income for the country. The gross domestic product (GDP) or gross domestic income (GDI) is one of the measures of national income and output. GDP can be defined in three ways, which should give identical results. First, it is equal to the total expenditures for final goods and services produced within the country in a specified period of time (usually a 365-day year). Second, it is equal to the sum of the value added at every stage of production by all the industries, plus taxes and minus subsidies on products. Third, it is equal to the sum of the income generated byShow MoreRelatedEconomics and National Income1160 Words   |  5 Pagesfollowing figures refer to elements in its national income accounts. | | £ billions | |Consumption (total) |60 | |Investment |5 | |Government expenditure |8 | |Imports |10 | |Exports |7 | (a) What is the current equilibrium level of national income? (b) What is the level of injectionsRead MoreManagerial Economics National Income2704 Words   |  11 Pagesmeasurement of nation income Classical and Keynes approaches nATIONAL INCOM E: ----The t otal sum of goods and services produced by t he people of a count ry wit h t he help of capit als and national resources called Nat ional Income (Prof. Alfred Marshall) We can define Nat ional Income as t he collective achievement of a nat ion. In t his way, t he Nat ional Income is t he aggregat e of t he individual incomes. 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