National Income

National income and concept of GDP 

National Income NI or National Product is defined as the money value of all final goods and services produced within the domestic territory of a country in an accounting year plus net factor income from abroad . 

Domestic income is the value of production within the domestic territory of a country .These different concepts of national income are :

1. Gross Domestic Product at Market Price ( GDP at MP )

 2. Gross National Product at Market Price ( GNP at MP )

 3. Net National Product at Market Price ( NNP at MP ) 

4. Net Domestic Product at Market Price ( NDP at MP )

 5. Net Domestic Product at Factor Cost ( NDP at FC )

 6. Gross Domestic Product at Factor Cost ( GDP  at FC )

 7. Gross National Product at Factor Cost ( GNP at FC )

 8. Net National Product at Factor Cost ( NNP at FC  ) 

Concept of GDP

1 .GDP at MP is a macro concept which is defined as the market value of the final goods and services produced within the domestic territory of a country during one year by all production units inclusive of net indirect taxes and depreciation .

2.  Gross National Product at Market Price ( GNP ):

 GNP is defined as the market value of the final goods and services produced in the domestic territory of a country by normal residents during an accounting year including net factor income from abroad . GNP is measured by the formula : GNP at MP = GDP + Net factor income from abroad

3. Net National Product at Market Price ( NNP at MP ) NNP is defined as the market value of the output of final goods and services produced by normal residents of an economy in its domestic territory during an accounting year exclusive of depreciation and inclusive of net factor income from abroad . 

4 .Net Domestic Product at Market Price ( NDP at MP )

 NDP MP is defined as the market value of final goods and services produced in the domestic territory of a country by its normal residents and non residents or by all during an accounting year less of depreciation .

 NDP at MP can be calculated by the following formula : 

5.Net Domestic Product at Factor Cost ( NDP at FC )

 NDP is alternatively known as Net Domestic Income . NDP is defined as the total factor incomes earned by the factors of production . In other words , NDP is the sum of domestic factor incomes .

 NDP at FC can be calculated by the following formula:

 6 .Gross Domestic Product at Factor Cost ( GDP at FC ) GDP at factor cost is defined as the sum of net value added by all the producers in the domestic territory of a country inclusive of depreciation during an accounting year . 

GDP is measured by the following formula : 

7 .Gross National Product at Factor Cost ( GNP at FC )

 GNP is defined as the sum of gross value at factor cost by normal residents of a country during a year and net factor income from abroad 

GNP is calculated by the following formula: =

 GNP at FC = NNP at FC + Depreciation 

 GNP at FC = GNP at MP - Net indirect taxes  

8 .Net National Product at Factor Cost ( NNP at FC ) or National Income 

National Income is defined as the factor income accruing to the normal residents of the country ( rent , interest , profit and wages ) during a year . It is the sum of domestic factor income and net factor income from abroad . NNP is defined as the sum of net value added at factor cost by normal residents in the domestic territory of a country and net factor income from abroad in an accounting year .

 Calculation formula :