SS2 Third Term Economics Lesson Note – Elements of National Income Accounting

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WEEK 2          

TOPIC: Elements of National Income Accounting

CONTENT:

• Meaning of National Income Concepts and their uses
• Ways of measuring national income and their limitations
• Uses and limitations of national income estimates, trend and structure of national income

Sub-Topic 1: Meaning of National Income

Definition

National income is the monetary value of all the goods and services produced within a country over a given period of time, usually a year plus net income from abroad. It also includes the income accruable to all factors of production: land, labour capital and entrepreneur. The national income is different from the income of the government. The national income is the value of all economic activities of the country for a particular period of time while government income is the revenue raised through taxation, borrowing, fees, etc.

The government also contributes to the National Income.

In conclusion, the national income of a country is the summation of income received by the citizen of the country whether the income is earned in the country or earned in another countries minus the income generated in the country but traceable to the foreigners.

National Income Concepts

The major concepts of National Income include

• Gross Domestic Product (GDP)
• Gross National Product (GNP)
• Net National Product (NNP)
• Personal income (PI)
• Disposable income
• Net Domestic Product (NDP)
• Income per capital

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