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Economics by Manish Mishra: Basic Formulae of National Income Accounting

The document outlines key formulas and methods for calculating various measures of national income and output in an economy, including: 1) It defines Gross Domestic Product (GDP) and how it is calculated using the income, expenditure, and value added methods. 2) It explains how Net National Product (NNP) and National Income are derived by making adjustments to GDP for depreciation and net income from abroad. 3) It provides the formulas for calculating other national accounting aggregates like National Disposable Income and Personal Disposable Income.

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Anurag Lal
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34 views

Economics by Manish Mishra: Basic Formulae of National Income Accounting

The document outlines key formulas and methods for calculating various measures of national income and output in an economy, including: 1) It defines Gross Domestic Product (GDP) and how it is calculated using the income, expenditure, and value added methods. 2) It explains how Net National Product (NNP) and National Income are derived by making adjustments to GDP for depreciation and net income from abroad. 3) It provides the formulas for calculating other national accounting aggregates like National Disposable Income and Personal Disposable Income.

Uploaded by

Anurag Lal
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ECONOMICS BY MANISH MISHRA

Basic formulae of National Income Accounting 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. GROSS Depreciation = NET NET + Depreciation = GROSS DOMESTIC PRODUCT + net factor income from abroad = NATIONAL PRODUCT. NATIONAL PRODUCT - net factor income from abroad = DOMESTIC PRODUCT MARKET PRICE net indirect taxes = FACTOR COST FACTOR COST + net indirect taxes = MARKET PRICE COMPENSATION OF EMPLOYEE = wages and salaries in cash and in kind + employers contribution to social security + retirement pension OPERATING SURPLUS = rent + interest + profit PROFIT = dividends + corporate tax + undistributed profit VALUE OF OUT PUT = sales + change in stock CHANGE IN STOCK = closing stock opening stock GROSS VALUE ADDED = value of output intermediate consumption NET INDIRECT TAXES = indirect taxes subsidies NET FACTOR INCOME FROM ABROAD = factor income received from abroad factor income paid to abroad. NET EXPORTS = exports imports GROSS DOMESTIC CAPITAL FORMATION = gross domestic fixed capital formation + change in stock

CALCULATION OF NATIONAL INCOME BY INCOME METHOD COMPENSATION OF EMPLOYEES + RENT + INTEREST + PROFIT + MIXED INCOME (IF GIVEN) ______________________________________ = NDP @ fc + NET FACTOR INCOME FROM ABROAD _______________________________________ = NNP @ fc

CALCULATION OF NATIONAL INCOME BY VALUE ADDED METHOD VALUE OF OUTPUT - INTERMEDIATE CONSUMPTION _____________________________________

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ECONOMICS BY MANISH MISHRA


= GDP @ mp - CONSUMPTION OF FIXED CAPITAL _____________________________________ = NDP @ mp + NET FACOR INCOME FROM ABROAD ______________________________________ = NNP @ mp - NET INDIRECT TAXES _______________________________ = NNP @ fc CALCULATION OF NATIONAL INCOME BY VALUE ADDED METHOD PRIVATE FINAL CONSUMPTION EXPENDITURE + GOVT. FINAL CONSUMPTION EXPENDITURE + GROSS DOMESTIC CAPITAL FORMATION + NET EXPORTS = GDP @ mp (If Domestic capital formation is NET the it comes NDP @ mp) - CONSUMPTION OF FIXED CAPITAL _____________________________________ = NDP @ mp + NET FACOR INCOME FROM ABROAD ______________________________________ = NNP @ mp - NET INDIRECT TAXES _______________________________ = NNP @ fc CALCULATION OF NET NATIONAL DISPOSABLE INCOME AND GROSS NATIONAL DISPOSABLE INCOME NNP @ mp + NET CURRENT TRANSFERS FROM ABROAD

9717335481,9312441580

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ECONOMICS BY MANISH MISHRA


= NET NATIONAL DISPOSABLE INCOME + DEPRECIATION = GROSS NATIONAL DISPOSABLE INCOME CALCULATION OF PRIVATE INCOME, PERSONAL INCOME NAD PERSONAL DISPOSABLE INCOME NATIONAL INCOME ( NNP @ fc) - INCOME FROM PROPERTY AND ENTERPRENEURSHIP OF GOVT DEPARTMENTAL ENTERPRISES - SAVINGS OF NON DEPARTMENT ENTERPRISES = FACTOR INCOME FROM NATIONAL PRODUCT ACCRUING TO PRIVATE SECTOR + NET CURRENT TRANSFERS FROM GOVT. + NET CURRENT TRANSFERS FROM ABROAD. + PUBLIC DEBT INTEREST = PRIVATE INCOME - CORPORATE TAX/ PROFIT TAX - CORPORATE SAVINGS/ UNDISTRIBUTED PROFIT/RETAINED EARNINGS = PERSONAL INCOME - DIRECT TAXES - MISCELLANEOUS RECEIPTS OF GOVT ADMINISTRATIVE DEPARTMENTS ( If given) PERSONAL DISPOSABLE INCOME

PERSONAL DISPOSABLE INCOME = CONSUMPTION EXPENDITURE BY HOUSEHOLDS + HOUSEHOLD SAVINGS

9717335481,9312441580

[email protected]

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