Nationl Income

The money value of the human resources of a country combined with capital acting on its natural resources produced annually various quantities of goods and services is called national income of a country. The total market value of all final goods and services produced in a year is National Income.

Alternatively, National Income can be defined as:


United Nations defines national income in the following three ways:

Net National Product (NNP)

Net National Product is the aggregate of net value added in all branches of economic activity during a specified period, including net income from abroad.

Sum of the Distributive Shares (SDS)

National Income is the aggregate of income accrued to the factors of production in the form of wages, profits, interest and wage, etc. in specific period.

Net National Expenditure (NNE)

National Income is the aggregate of expenditure on final consumption of goods and services, plus domestic and foreign investment.

According to Pigou, "National dividend is that part of the objective income of the community, including of courses income derived from abroad, which can be measured in money."

In the view of modern economists, National Income is the flow of output, income and expenditure. These three flows are always equal per units of time i.e.

National Output=National Income=National Expenditure


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