Short note on national income. Measurements of National Income 2022-12-23

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Christopher Columbus was an Italian explorer and navigator who is credited with the discovery of the Americas. Born in the Republic of Genoa in 1451, Columbus was a skilled mariner who had a passion for exploration.

In 1492, Columbus received funding from King Ferdinand and Queen Isabella of Spain to embark on a journey to find a westward route to Asia. Columbus believed that he could reach Asia by sailing west across the Atlantic Ocean, and the Spanish monarchy saw this as an opportunity to expand their empire and increase their trade with the East.

On August 3, 1492, Columbus set sail from Spain with three ships: the Nina, the Pinta, and the Santa Maria. After a treacherous journey that lasted more than two months, Columbus and his crew landed on an island in the Bahamas on October 12, 1492.

Despite the fact that Columbus had not reached Asia as he had intended, he still considered the voyage a success. He believed that he had discovered a new route to the East and named the islands he encountered the West Indies.

Columbus made three more voyages to the New World, exploring the Caribbean and parts of Central and South America. He brought back gold, spices, and other valuable commodities, which helped to enrich the Spanish monarchy and establish Spain as a major European power.

However, Columbus's legacy is not without controversy. The arrival of Europeans in the Americas had a devastating impact on the indigenous peoples who lived there. Many of them were subjected to violence, enslavement, and diseases brought by the Europeans, which led to a significant decline in their populations.

Despite these negative consequences, Columbus's voyages had a significant impact on the course of history. They opened up the New World to exploration and colonization, which led to the establishment of new trade routes and the exchange of ideas, goods, and people between the Old World and the New.

Overall, Christopher Columbus was a significant figure in history who is remembered for his bravery, determination, and curiosity. His voyages helped to shape the modern world and continue to be celebrated and studied to this day.

Study Notes on National Income (With Diagram)

short note on national income

ADVERTISEMENTS: Another area in which imputations arise is in valuing the services provided by the government. Goods and services produced by the non-residents living in the country are excluded. Leakage: Leakage is the amount of money that is withdrawn from the circular flow of income. The conceptual problem can be dealt with as follows: Now the question is whether these services — the maintenance of law and order and defence — are to be regarded as services which satisfy the wants of the consumers directly, or are they to be regarded as facilitating the production of other goods and services? Measures the contribution of the residents to the development of the economy. So long as the magnitude of these imperfections remains fairly constant overtime, GDP is useful for comparing economic activity from year to year. GNP therefore is the sum of GDP and net factor income from abroad.

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National Income Definition, Concept, GDP and GNP

short note on national income

It is also called DOMESTIC INCOME. It is important to exclude all transfer payments as these represent nothing more than a redistribution of income from taxpayers to the transfer recipients, including them would involve double counting. Gross Fixed Capital Formation refers to the expenditure made on the purchase of fixed assets. Net National Product NNP at MP: Is market value of net output offinalgoods and services produced by an economy during a year and net factor income from abroad. Changes in both physical output and the price level have an impact on it. National income accounts allocate GDP among four broad categories: Consumption C.

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Measurements of National Income

short note on national income

It is assumed that the households spend all their income on the goods and services produced by the firms i. In more recent years, the rate of growth of national income has accelerated. If GDP is to include the value of these goods and services, we must use an estimate of their value. Whether the level of income is in equilibrium or not, aggregate actual investment is always identically equal to aggregate actual saving. Definition: Consumption C : It is regarded as total expenditure by households on goods and services which yield utility in the current period.

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Class 12 Economics Notes for National Income and Related Aggregates

short note on national income

Therefore, the final product produced by public enterprises or the values-added by them should be included in the national product. There are two types of GDP namely Nominal GDP GDP at current price and Real GDP GDP at constant price. Gross Domestic Product GDP Gross National Product GNP The value of goods and services produced within a country in a financial year. If the national income is equitably distributed, then the standards of living will be high. Similarly, if prices are falling, the value of the new items are likely to fall less than that of the old items. It comprises the costs of production such as wages, rent, interest, input prices, profit, and so on. However, indirect taxes and subsidies do pose some problems.

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Notes on National Disposable Income (NDI)

short note on national income

It includes the cost of production like wages, input prices, profits, rent, interest, etc. National Expenditure : This is found by adding up all the spending on the final goods and services produced by firms. But it may not stand true all the time. Personal income includes wages and salaries, fees and commission, bonus, fringe benefits, dividends, interest earnings and earnings from self-employment. This identity has nothing to do with the equilibrium in the economy. We have already defined almost all of the components of GDP except NX, net exports, that is, trade with other countries in an open economy.

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National Income Concepts

short note on national income

If we subtract personal tax payments and certain non-tax payments to the government such as parking tickets , we obtain disposable personal income. Question and Answers on Aggregates of National Income in Economics: — Define the various aggregates of national income? C Only statements 1, 3, and 4 and true. Value of output includes the sales made during a particular year and the unsold stock of goods left out during that year. Vedantu is the go-to website for every student when it comes to looking for answers regarding anything academic-related. VALUE OF OUTPUT is the market value of all goods and services produced in an economy during a period of one year.

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National Income Accounting Class 12 Notes CBSE Macro Economics Chapter 2 [PDF]

short note on national income

Receipts from illegal activities should also be excluded from the national income calculation. To solve the valuation problem of such services, we must take into account the cost of providing these services and include items in the national product. Firstly, the government may be engaged in the production of goods and services which are sold in a market like private firms. It includes the incomes of all factors of production, such as rent, wages, profits, and interest. This is a part of the national income, though this part does not arise out of production within the domestic economy.

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What is National Income? Concept, definition, measurement and all you need to know

short note on national income

Thus, National Income at Factor Cost shall be equal to NNP at Market Price LESS Indirect Taxes ADD Subsidies Question on National Income Q. In India, national income, as also per capita income, have been continuously increasing. To know more, you can always visit Vedantu as it offers detailed explanations curated by expert teachers. Thus, we exclude from national income accounting all personal and household services which do not pass through the market. This represents an income of £100.

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CHAPTER 5 : NATIONAL INCOME NOTES PDF

short note on national income

This measures the total monetary value of all the goods and services produced by the people of a country regardless of whether they in or outside the country. Following are certain situations: — 1. Again, some part of C + I + G is not spent on domestically produced goods and services but on goods and services produced by foreigners. Accordingly the number of countries which prepare and publish official national income figures has been increasing rapidly. Article shared by National income is, broadly speaking, the money value of all final outcomes of all economic activities of the people of a country. DIFERENCE BETWEEN NATIONAL AND DOMESTIC INCOME S.

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Give a Brief Note on the Importance of National Income

short note on national income

Disposable Income DI : It is the income left with the individuals after the payment of direct taxes from personal income. When it comes to Macroeconomics Class 12 Chapter 2 notes, Vedantu is the best option for securing good marks in the exam. Normal Resident of a country: A person or an institution who normally resides in a country and whose Centre of economic interest lies in that country is called a normal resident. National Income of any country means the complete value of the goods and services produced by any country during its financial year. Depreciation is called the consumption of fixed capital. Savings S are that part of the disposable income which is not spent in the current period. Thus, it is equivalent to the sum of all factor incomes compensation of employees, rent, interest, profit, and mixed income of self-employed created in the country's domestic area.

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