Answer in Brief
Write a short answer to the following question :
Explain the features of National Income.
Answer the following:
Explain any four features of national income
Features of National Income
- Macro economic concept: The national income is a study of the Macro economics concept. It is the aggregate income of all goods and services produced in a country during a given year. It provides a clear picture country’s economic performance during a particular year.
- Flow concept: National income is a flow concept i.e. flow of goods and services produced in the economy during a year. It varies according to variations in production within the country. National income flows only if there is productivity activity in the economy.
- Real terms and Money Terms: The national income can be expressed in real terms as well as in money terms.
- Real National Income: when national income is expressed as a flow of goods and services produced in the economy in a year, it is called real national income.
- Money National Income: When national income is expressed as the value of all goods and services produced in the economy during a year, it is called money national income.
- Value of final goods and services: While calculating national income, only the value of final goods and services is included. The value of intermediate goods such as raw materials is not included. This is done to avoid double counting.
- Transfer Income: While calculating national income, the transfer income in the form of old-age pension, unemployment allowances, scholarships, etc., is not included. The transfer income is received by receipts without providing any factor unit such as labour, capital, etc.
- Financial Year: In India, the national income is estimated by the Central Statistical Organisation. It is annually estimated and measured for a financial year beginning from 1st April and ending on 31st March.
- Net income from Abroad: While calculating national income the net income received from abroad are included. The net income from abroad includes the difference between exports and imports, as well as net income from investments abroad. If the net income is negative, then that amount is deducted from the national income.
Concept: Features of National Income
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