Economics · Ch 9 — National Income
Important Aggregates of National Income: GDP, GNP, NDP and NNP
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Important Aggregates of National Income: GDP, GNP, NDP and NNP
The four most-used aggregates in national income accounting are built up from one another:
| Aggregate | Meaning | Formula |
|---|---|---|
| GDP (Gross Domestic Product) | Money value of all final goods and services produced within the domestic territory of a country in a year, by residents and non-residents alike | — |
| GNP (Gross National Product) | Money value of all final goods and services produced by the normal residents of a country (within the country and abroad) in a year | |
| NDP (Net Domestic Product) | GDP after deducting depreciation (wear and tear of capital) | |
| NNP (Net National Product) | GNP after deducting depreciation |
Net Factor Income from Abroad (NFIA) is the key link between the domestic and national concepts. It equals factor income earned by a country's residents from abroad (wages of Indians working overseas, profits/interest on Indian-owned assets abroad) minus factor income earned by non-residents within the country (profits repatriated by a foreign company operating in India, salaries paid to foreign employees working in India). …