Determination of national income
The UN is making great efforts to encourage all countries to collect data on national income.
What is national income? This is a general concept that covers the entire annual flow of goods and services in the economy, calculated in monetary terms. Often, instead of this category, we use the almost equivalent concept of “national product”, or “pure national product”. National income, or national product, is the final outcome in those calculations where the monetary scale is used to measure among themselves all the various kinds of machines, oranges, and other things that are produced in any society with the resources of land, labor, and capital that belong to it.
In a simple economy, it is easy to calculate the amount of national income or national product as the sum of the annual flow of goods and services in monetary terms. The net national product, or as experts call it, “national income measured in market prices,” is defined as the total monetary value of the entire flow of final products consumed by society.
Calculating net national product (NNH) and gross national product (GNP) in two ways in absolute terms.
This table summarizes the basic principles of calculating national income. The objective of providing a general economic picture of national income is being accomplished. But, because we are interested in what happens from month to month. From quarter to quarter in the economy, it will be useful for us to briefly familiarize ourselves with three other indicators. We are talking about after-tax income, personal and national income.
Table 8.1 Resource requirements by component
Calculation by the method of flow of goods | Cost flow calculation |
| Personal consumption expenditure including: durable goods; short-term goods; services; Public procurement of goods and services; Net domestic private investment; Net exports of goods and services; Pure national product; Depreciation deductions; GNP. | Wages and other incomes of hired workers and employees; Net percentage; Rental income; Indirect taxes; Income of non-corporate enterprises; Corporate profits before taxes; Dividends; Retained earnings; Corporate income taxes; The amount of declared profit; Adjustment for changes in the value of inventories; Pure national product; Depreciation deductions; GNP. |