It is usually centred around the family unit. 4) It helps in comparing the standard of living. (But each money flow is in the opposite direction to the real flow). However, real GDP is adjusted for inflation, while nominal GDP isn't.Join 350,600+ students who work for companies like Amazon, J.P. Morgan, and Ferrari in the economy of the country. The importance of national income statistics is to show a national income figures and show the performance of the company. Our editors will review what you’ve submitted and determine whether to revise the article.The most commonly used indicator of national output is the National income may be derived from the GNP by making allowances for certain non-income costs included in the GNP, mainly the costs of indirect taxes, subsidies, and the consumption of fixed capital (depreciation). The inclusion of intermediate goods would involve double counting and will, therefore, give an exaggerated estimate of gross national product.An example will clarify this point. ThereforeAfter a good part of personal income is paid to government in the form of personal taxes like income tax and personal property taxes, what remains of personal income is called disposable income.Disposable Income = Personal Income—Personal Taxes.Disposable Income can either be consumed or saved. Economic indicators are often collected by a government agency or private business intelligence organization in the form of a census or surveyGross National Product (GNP) is a measure of the value of all goods and services produced by a country’s residents and businesses. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. One of the main uses of national income data is to recognize if a nation (government) has chosen the correct economic policies. The capital goods, like machinery, wear out or fall in value as a result of their use in the production process.This consumption of fixed capital or fall in value of capital due to wear and tear is called depreciation. Login Every single government on earth strives to achieve economic growth.
This is also clearly visible if we look for the growth of Indian IT and ITES industries. Another use of national income statistics is as a basis to compare countries, either directly or by economic growth or living standards. )Obviously, in moving from national income as an indicator of income earned to personal income as an indicator of income actually received, we must subtract from national income those three types of incomes which are earned but not received and add in income received but not currently earned. Actually, the value of cloth includes also the value of cotton, which having been accounted for already, should not be added a second time.
It may, however, be pointed out that this flow of money need not always continue at a steady level.
Company Registration No: 4964706. The function of households is to consume goods and services for the satisfaction of their wants; and the function of productive enterprises is to produce goods and services for the satisfaction of the wants of households.The household is the basic consuming unit in economic life.
It will also make it easy to grasp the alternative interpretations of National Income.In every economy, there are households on the one hand and productive enterprises or firms on the other.
Comment on the share of GDP components over the period, and the rationale behind such observance.The percentage share of GDP for Agriculture sector decreased from 28.75 in 1990-91 to 16.34 in 2007-08, for Industry sector it remains almost constant (varies from 19.80 in 1990-91 to 18.50 in 2008-09) and for the Service sector it increased from 48.33 in 1990-91 to 64.55 in 2008-09.These figures indicate that after liberalization in 1990-91, there is a tremendous growth in Indian Service Sector.
India is dominating worldwide in this sector and this is the major contributor of the Indian GDP.