1. Determination of national income<br />National income is the money value of all final goods and services produced in<br />a country during a period of one year.<br />•GNP (Gross National Product)<br />•GDP (Gross Domestic Product)•NNP (Net National Product)•NDP (Net Domestic Product)<br />GNP & GDP<br />GNP is defined as the money value of all final goods and services produced in a<br />country during a period of one year plus the income of nationals from abroad.GNI is sum of all the factor payments made – wages for labour, rent for land, profitfor entrepreneurs and interest on capital.<br />The difference between GDP and GNI is only procedural. The final value of both<br />remains the same.<br />NOTE: GNP includes production for self consumption, rent from owner occupied<br />property and expenditure on public administration, defence etc.<br />GDP is defined as the market value of the goods and services produced within the<br />nation’s geographical territory, irrespective of the ownership of resources.<br />GDP = GNP – NIA (Net income from abroad)<br />The difference between GDP and GNP at market prices arises due to the existenceof “net factor income from abroad”. GDP does not include net factor income from abroad<br />