Economics · Class 12 Commerce
Ch 3National Income — Class 12 Economics, concept-first.
National income is the total value of goods and services produced by a country's economy during a year, and it is the yardstick every government and planner uses to judge how the economy is doing.
Key concepts
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Concepts of National Income (GDP, GNP, NNP, NDP)
National income can be expressed through several related aggregates, and knowing which one is being quoted matters. Gross Domestic Product (GDP) values final output produced within a country's borders.
Most relevant Q&A
- Define Gross Domestic Product (GDP) and Gross National Product (GNP). How is GNP derived from GDP?Free
- Distinguish between Gross National Product (GNP) and Net National Product (NNP). What role does depreciation play in this distinction?Free
- Explain the difference between National Income at Market Price and National Income at Factor Cost.Free
- Write a short note on: SGDPPreview
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Concepts of National Income
National income is the total value of goods and services produced by a country's economy during a year, and it is the yardstick every government and planner uses to judge how the economy is doing.
Methods of Measuring National Income
India's National Statistical Office estimates national income by combining three internationally recognised approaches, cross-checking one against another wherever data permits.
History and Institutional Framework of National Income Estimation in India
Long before independence, individual scholars attempted rough estimates of India's income mainly to argue about the drain of wealth under colonial rule.
Trends in National Income and Sectoral Composition
Since independence, India's national income has grown many times over in real terms, but the more striking change for students of Economics is the shift in which sector produces that income.
Per Capita Income
Per Capita Income (PCI) divides a country's total national income by its population, giving a rough average of income per person:
Difficulties in Measurement of National Income in India
Difficulties that Andhra Pradesh Intermediate second-year Economics students should be able to list and explain are rooted in the structure of the Indian economy itself, which makes estimating nationa…
Exercises
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- Q1Define Gross Domestic Product (GDP) and Gross National Product (GNP). How is GNP derived from GDP?Free
- Q2Distinguish between Gross National Product (GNP) and Net National Product (NNP). What role does depreciation play in this distinction?Free
- Q3Explain the difference between National Income at Market Price and National Income at Factor Cost.Free
- Q4Explain the three methods used to measure national income in India. Which method is most commonly used for the tertiary sector, and why?Preview
- Q7Trace briefly the history of national income estimation in India. Who is generally credited with the first scientific estimate?Preview
- Q9Discuss the trends in national income and the changes in the sectoral composition of the Indian economy since independence.Preview
- Q10What is Per Capita Income? Explain how it is calculated and state one limitation of using it as a measure of a country's welfare.Preview
- Q12Discuss the major difficulties involved in measuring national income in the Indian economy.Preview
- Q13Why is it difficult to estimate the value of non-market services, such as the work done by a homemaker, in national income accounting?Preview
Sample & Board Papers
Sample papers and previous-year board questions for this subject.
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More questions
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- Example 5From the following data, calculate Gross Domestic Product (GDP) by the expenditure method (all figures in Rs crore): Private Final Consumpti…Free
- Example 6From the following data (all figures in Rs crore), calculate National Income (NNP at Factor Cost) by the income method: Compensation of Empl…Preview
- Example 11Suppose a country's National Income (NNP at Factor Cost) is Rs 2,00,000 crore and its population is 40 crore. Calculate its Per Capita Incom…Preview