Economy Chapters

1. Economy and Economics2. Characteristics of Indian Economy3. Agriculture and Land Development4. National Income5. Planning6. Unemployment7. Trade and Commerce8. New Economic Policy9. Indian Financial System10. Indian Fiscal System11. Banking in India12. Tax System13. Industry14. Foreign Trade15. Glossary of Economic and Financial Terms16. Some Noteworthy Facts17. Socio Economic and Caste Census 2011

National Income

Understanding the aggregate economic performance of a country measured through its national income.

Definition

National Income is the total value of all final goods and services produced by a country’s residents in a given time period, usually one year.

Key Concepts

  • GDP (Gross Domestic Product): Total value of goods and services produced within a country’s borders.
  • GNP (Gross National Product): GDP plus net income from abroad.
  • Net National Product (NNP): GNP minus depreciation (wear and tear of capital goods).
  • Personal Income: Income received by individuals before taxes.
  • Disposable Income: Income available to individuals after taxes.
  • Methods of Measurement: Product method, income method, and expenditure method.
  • Importance: Helps assess economic growth, plan government policies, and compare economic performance.

Previous Year Questions

  • SSC CGL 2020: What does GDP stand for?
  • Gross Domestic Product
  • HSSC 2019: What is the difference between GDP and GNP?
  • GDP measures production within a country; GNP includes net income from abroad.
  • RRB JE 2018: Define Net National Product.
  • GNP minus depreciation of capital goods.
  • SSC CHSL 2021: Name three methods to calculate national income.
  • Product method, income method, and expenditure method.
  • HSSC 2021: What is disposable income?
  • Income available to individuals after deducting taxes.
  • SSC MTS 2020: Why is national income important?
  • It helps evaluate economic performance and formulate policies.
  • RRB NTPC 2020: What is the difference between personal income and national income?
  • Personal income is income received by individuals; national income is total income earned by the nation.
  • SSC GD 2021: What is depreciation in national income accounting?
  • The reduction in value of capital goods due to wear and tear.
  • HSSC 2019: Which method of national income calculation considers total expenditure?
  • Expenditure method.
  • SSC CGL 2021: What does NNP stand for?
  • Net National Product.
  • RRB JE 2021: How is GDP calculated?
  • By adding the market value of all final goods and services produced within a country.
  • SSC MTS 2019: What is the significance of national income statistics?
  • They provide data for economic planning and policy-making.
  • HSSC 2020: What is the personal disposable income formula?
  • Personal income minus direct taxes.
  • SSC CHSL 2019: What is the role of government in measuring national income?
  • To collect data, analyze economic performance, and publish national income statistics.
  • RRB NTPC 2019: Can transfer payments be included in national income?
  • No, because they do not correspond to production of goods or services.
  • SSC GD 2020: What is factor income?
  • Income earned by factors of production like wages, rent, interest, and profit.
  • HSSC 2021: What are intermediate goods?
  • Goods used as inputs in the production of final goods and services.
  • SSC CGL 2019: Why are only final goods counted in GDP?
  • To avoid double counting.
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