National Income & Gross Domestic Product (Economic Development) Part-I

NNPmp)= GNPmp - Depreciation

NNI fc(NI) = NNPmp - Indirect Taxes + Subsidies

NNPmp-Net Product Taxes - Net Production Taxes

NI = GNPmp-Depreciation - Indirect Taxes + Subsidies

The relation between different forms of National Product-

Net Indirect Taxes (NIT) = Indirect Taxes - Subsidy,

GNP = Gross National Product, NNP = Net National Product,

GDP = Gross Domestic Product, NDP = Net Domestic Product,

MP = Market Prices, FC = Factor Cost,

D = Depreciation, NFI = Net Factor Income from Abroad

NNPmp)= GNPmp - Depreciation

NNI fc(NI) = NNPmp - Indirect Taxes + Subsidies

NNPmp-Net Product Taxes - Net Production Taxes

NI = GNPmp-Depreciation - Indirect Taxes + Subsidies

The relation between different forms of National Product-

Net Indirect Taxes (NIT) = Indirect Taxes - Subsidy,

GNP = Gross National Product, NNP = Net National Product,

GDP = Gross Domestic Product, NDP = Net Domestic Product,

MP = Market Prices, FC = Factor Cost,

D = Depreciation, NFI = Net Factor Income from Abroad

NNPmp)= GNPmp - Depreciation

NNI fc(NI) = NNPmp - Indirect Taxes + Subsidies

NNPmp-Net Product Taxes - Net Production Taxes

NI = GNPmp-Depreciation - Indirect Taxes + Subsidies

The relation between different forms of National Product-

Net Indirect Taxes (NIT) = Indirect Taxes - Subsidy,

GNP = Gross National Product, NNP = Net National Product,

GDP = Gross Domestic Product, NDP = Net Domestic Product,

MP = Market Prices, FC = Factor Cost,

D = Depreciation, NFI = Net Factor Income from Abroad

NNPmp)= GNPmp - Depreciation

NNI fc(NI) = NNPmp - Indirect Taxes + Subsidies

NNPmp-Net Product Taxes - Net Production Taxes

NI = GNPmp-Depreciation - Indirect Taxes + Subsidies

The relation between different forms of National Product-

Net Indirect Taxes (NIT) = Indirect Taxes - Subsidy,

GNP = Gross National Product, NNP = Net National Product,

GDP = Gross Domestic Product, NDP = Net Domestic Product,

MP = Market Prices, FC = Factor Cost,

D = Depreciation, NFI = Net Factor Income from Abroad

Net national product or NNP is the market value of all the finished goods and services that are produced by citizens of a nation, living domestically and internationally during a year.

Net national product considers all the goods, products and services that are manufactured by the country's citizens, irrespective of their location, or in other words, net national product considers products that are produced domestically and also from overseas.

NNP is one of the important metrics for determining the actual growth of a nation. It measures how much the country is able to consume in a given period of time.

In other words, National Income of a country is defined as the sum of total factor incomes accruing to the normal residents of that country from the production activity performed by them both within and outside the national boundaries in a year. In India computation of National Income is the responsibility of National Statistical Office (NSO), Government of India.

where

Y = National Income

C = Consumption expenditure

I = Investment expenditure

G = Government expenditure

and

X  -  M = Difference in export and import (Net exports)

1. Product method

2. Income method

3. Expenditure method

The diminishing cost method is not used to calculate the GDP.

Gross Domestic Product (GDP) represents the final value of goods and services produced within a country's borders in a specific period, typically a year. The GDP growth rate is a crucial indicator of economic performance, reflecting health, growth, and development.

Gross Domestic Product (GDP) is calculated using three primary methods: the Production Method, Expenditure Method, and Income Method. Each approach offers unique insights into a nation's economic activities. The methods of estimation of GDP are as follows:

Income Method: It measures the total income earned by the factors of production, that is, labour and capital, within a country's domestic boundaries
GDP (as per income method) = GDP at factor cost + Taxes - Subsidies.

Expenditure Method: It calculates the total amount of money spent on products and services within a nation's borders by all entities.
GDP (as per expenditure method) = C + I + G + (X-IM)
C: Consumption expenditure,
I: Investment expenditure,
G: Government spending
(X-IM): Exports minus imports, that is, net exports.

Production (Output) Method: All commodities and services produced inside the borders of the country are valued in terms of money or market value. Real GDP, or GDP at constant prices, is calculated to prevent a skewed assessment of GDP brought on by changes in price levels. GDP (as per output method) = Real GDP (GDP at constant prices) - Taxes + Subsidies.

GNP refers to all the economic output produced by a nation's normal residents, whether they are located with in the subtracted from the GNP the obtained value is NNP i.e. GNP - depreciation + NNP. Thus option (a) and (d) both can be correct .

Nominal GDP measures the value of all finished goods and service produced by a country at their current market prices . Nominal GDP plays a significant role in calculating the GDP deflator as well as determining the real GDP.