Question

Mention any four important national income aggregates.

Answer 1

Here are the four important national income aggregates explained:

1. Gross Domestic Product (GDP): The total value of all final goods and services produced within the domestic territory of a country during a year, including production by both nationals and non-nationals.
2. Gross National Product (GNP): The total value of all final goods and services produced by the residents (nationals) of a country in a year, including income from abroad and excluding income earned by foreigners in the domestic territory.
3. Net Domestic Product (NDP): GDP minus depreciation (consumption of fixed capital). It shows the net value of goods and services produced within the country after accounting for the wear and tear of capital assets.
4. Net National Product (NNP): GNP minus depreciation. It represents the net income earned by a country’s residents after accounting for the depreciation of capital assets. It is also called national income when measured at factor cost.