NATIONAL INCOME

Marshall
The lab.& cap. Working
on its natural resources
produce annually a certain
aggregate of commodities
material and immaterial
including services of all
kinds….this is the true
national dividend or NI
 PIGOU
 PIGOU-INCLUDED INCOME DERIVED
FROM ABROAD (FROM FOREIGN
INVESTMENT)
 ONLY THOSE WHICH CAN BE
MEASURED( exchanged ) IN TERMS OF
MONEY
PIGOU IGNORED

Barter
Mothers service
Marrying your maid
servant
 FISHER

Consumption is the
ultimate
Piano or overcoat made
for me this year is not
part of this Ni rather the
services it renders this
year is important
 KEYNES
Expenditure Approach- Y= C + I
Factor income approach-- Y =F + Ep
F is the factor income toall like wages interest
rent
Ep is entrepreneurial profit

Sales – cost approach-- Y =A – U

A is Gross national product
U is the User cost (dep in use – dep when not
in use + exp. On maintainance )

Y=A - U -V
Vis the supplementary cost beyond managerial
control like fire obsolescence etc
 METHODS OF
MEASUREMENT
 Product method/Value added method
producer stage Value of Cost of Value
output interme added
diate
goods
Farmer Wheat 500 ---- 500
Miller Flour 700 500 200
Baker Bread 1000 700 300
total 2200 1200 1000
 Value added = Value of the output – value
of intermediate consumption
 2200 - 1200 = 1000 , the market value of
bread.
Product method
Net value added ,Primary sector(FC) 2000
NVA IN secondary sector (FC) 1100
NVA TERTIARY SECTOR (FC) 1000
Consumption of fixed capital 500
Ind tax 850
(less) subsidies (-) 150
-------------
GDP mp 5300
(less) ind taxes(850-150) (-) 700
--------------

GDPfc 4600
(less)consumption of fixed capital (-) 500
---------------
NDPfc 4100
Net factor income from abroad 100
---------------
NNPfc/ National income 4200
Income method
Compen to emplyees 1500
Interst Rent Profit 600
Mixed income of self employed 2000
Indirect tax 850
(less) Subsidies (-) 150
Consumption of fixed capital 500
--------------
GDPmp 5300
(less) Net ind tax (-) 700
GDPfc 4600
(less)con.fixed cap (-) 500
--------------
NDPfc 4100
Net factor incom from abroad 100
-------------------
NNPfc/NI 4200
Expenditure method
Pvt.fin.con . Exp 3500
Govt.fin.con exp 600
Investment exp 1300
Export of G&S 400
(less)imports (-) 550
---------------
GDPmp 5300
(less)net ind tax (-) 700
GDPfc 4600
(less) con. Of cap goods (-) 500
-----------------
NDPfc 4100
Net factor income from abroad 100
-----------------
NNPfc/NI 4200