calculation of national income

NATIONAL INCOME

UNDERSTANDING

National income is the total amount of income received by the public in a country for one year.

NATIONAL INCOME CONCEPTS

GDP / GDP (Gross Domestic Product)
Gross Domestic Product is the amount of product in the form of goods and services produced by production units within the boundaries of a Country for one year. In the calculation, including the production and services produced by companies / foreigners operating in the region concerned

PNB / GNP (Gross National Product / Gross National Product)
GNP is the total value of the goods and services produced by the people of a State in a certain period, usually one year, including the goods and services produced by the people of that State abroad.

Formula :

GNP = GDP - Net product to foreign countries

NNP (Net National Product)
                    NNP is the amount of goods and services produced by the community within a certain period, after deducting depreciation and capital substitution.

Formula :

NNP = GNP - Depreciation

NNI (Net National Income)
                    NNI is the sum of all receipts received by the public after indirect taxes (indirect tax)

Formula :

NNI = NNP - Indirect tax

PI (Personal Income)
                    PI is the total amount received by the public that actually reaches the public after deducted by retained earnings, insurance contributions, social security contributions, personal taxes and coupled with transfer payments.

Formula :

PI = (NNI + transfer payment) - (Retained earnings + Insurance contributions + Social security contributions + Individual tax)

IN (Disposible Income)
                    DI is the income received by the community that is ready to be spent by the recipient.

Formula :

DI = PI - Direct tax



NATIONAL INCOME CALCULATION

The purpose and benefits of the calculation of national income
The purpose of studying national income:

To know the level of prosperity of a State
To obtain accurate estimates of the value of goods and services produced by the community within a year
To help create a plan for the implementation of a futures development program.
Benefits of studying national income
Knowing about the economic structure of a State
Can compare the state of the economy from time to time between regions or between provinces
Can compare the state of the economy between countries
Can help formulate government policy.
Calculation of National Income
Production Method
National income is the sum of all value of goods and services produced by all economic sectors of society in a certain period

Y = [(Q1 X P1) + (Q2 X P2) + (Qn X Pn) ......]

Income Method
National income is the sum of all receipts (rent, wage, interest, profit) received by the owner of a production factor within a country for a period.

Y = r + w + i + p

Spending Method
National income is the sum of all expenditures made by all economic households (RTK, RTP, RTG, RT Overseas) within a country for one year.

Y = C + I + G + (X - M)

Income per capita

Revenue per capita is the average income of the population in a country. Revenue per capita is derived from the division of national income of a country with the population of the country. Revenue per capita also reflects GDP per capita.

Income per capita is often used as a measure of prosperity and the level of development of a country; the greater the income perkapitanya, the more prosperous the country.