Page 208 - DECO405_MANAGERIAL_ECONOMICS

Pavitar Parkash Singh, Lovely Professional University
Unit 13: Basic National Income Concepts

Unit 13: Basic National Income Concepts Notes

CONTENTS
Objectives

Introduction
13.1 Concept of National Income

13.1.1 Gross and Net Concept
13.1.2 National and Domestic Concepts

13.1.3 Market Prices and Factor Costs
13.1.4 Gross National Product and Gross Domestic Product

13.1.5 Net National Product
13.1.6 Personal Income

13.1.7 Disposable Income
13.2 Some Important Identities

13.3 Summary
13.4 Keywords

13.5 Self Assessment
13.6 Review Questions

13.7 Further Readings

Objectives

After studying this unit, you will be able to:

Explain the concept of national income
Discuss important identities related to national income

Introduction

Macroeconomics is concerned with the determination of the economy's total output, the price
level, the level of employment, interest rates and other variables. A necessary step in
understanding how these variables are determined is "national income accounting". The national
income accounts give us regular estimates of GNP — the basic measure of the economy's
performance in producing goods and services. National income is the most comprehensive
measure of the level of the aggregate economic activity in an economy. It is the total income of
a nation as against the income of an individual but the term national income is not as simple and
self-explanatory as the concept of individual income maybe.

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