Explain national income and its concepts
National income is an economic term referring to the sum of everything we earn as wages, coupled with everything we invest as capital. It is used in various ways to show the state of our economy at any given time through various economic indicators. They are: Gross National Product (GNP), Gross Domestic Product (GDP), Net National Product (NNP), National Income (NI), Personal Income (PI), Disposable Income (DI), and Per Capita Income (PCI).
Gross National Product: The sum of all consumer goods and services produced, all government expenditures, all imports and exports, all private domestic capital investments, and all international income and capital investments (GDP + net income).
Gross Domestic Product: The sum of everything that's produced or services rendered domestically in a year's time. It takes into account the price and quantity of the goods and services plus capital investments. It is also adjusted up or down by any foreign imports/exports.
Net National Product: The Gross National Product (GNP) minus depreciation. In other words, this is the market value.
The sum of all incomes earned by resources suppliers for their contribution of land, labor, capital and organizational ability which go into the years net production.
Personal Income: The sum of everything each person earns in a year's time before it's taxed. This is sometimes referred to as gross income.
Disposable Income: This is personal income minus taxes, or what can actually be spent by consumers. It is also referred to as net income.
Per Capita Income: National income divided by the total population of the country.
Each of these economic indicators is computed for a year's time, and sometimes several years can be displayed in flow charts to indicate past and/or current trends.