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Ashwani Panesar, Lovely Professional University
Unit 2: National Income
Unit 2: National Income Notes
CONTENTS
Objectives
Introduction
2.1 Meaning of National Income
2.2 National Aggregates (Important Concepts)
2.2.1 Gross Domestic Product (GDP)
2.2.2 GNP as a Sum of Expenditures on Final Products
2.2.3 GNP as the Total of Factor Incomes
2.2.4 Net National Product (NNP)
2.2.5 NNPFC (or National Income)
2.2.6 Personal Income
2.2.7 Disposable Income
2.2.8 Value Added
2.3. Methods of Measuring National Income in India (Simple Treatment)
2.3.1 Product Method
2.3.2 Income Method
2.3.3 Expenditure Method
2.4 Problems in Measuring National Income
2.5 Circular Flow of Income
2.5.1 Circular Flow of Income in a 2 Sector Model
2.5.2 Circular Flow of Income in a 3 Sector Model
2.5.3 Circular Flow of Income in a 4 Sector Model
2.6 Summary
2.7 Keywords
2.8 Review Questions
2.9 Further Readings
Objectives
After studying this unit, you will be able to:
Describe the concept of national income;
Explain and calculate various national aggregates;
Discuss the methods of calculating national income;
State the problems in measuring national income;
Realise the circular flow of income in 2, 3 and 4 sector model.
LOVELY PROFESSIONAL UNIVERSITY 13
