1. National Income -By Suvarna Kamble.

2. National income is the final outcome of alleconomic activities of a nation valued interms of money. It is most important macroeconomic variable. The level of national income determines thepattern which determines the level ofaggregate demand for goods and services. Its distribution pattern determines the Patternof demand for goods & Services. It means how much of what kinds of goodsand services are demanded and produced. 3. It is the most comprehensive measure of thelevel of the aggregate economic activity in aneconomy. It is the total income of a nation as against theincome of an individual But not all the income received by individualsduring a given period can be included in thenational income Lly , not all the income that is generated inthe Process of Production in an economyduring a given Period is received by theindividuals in the economy. 4. National Income as the aggregate of moneyvalue of the annual flow of final goods andservices In the national economy during agiven Period National Income is both a flow of goods andservices and a flow of money incomes. -Paul studenski 5. Measures of National Income: GDP GNP NNP Personal Income Disposable Income Value added 6. Personal Income: personal Income is calculated by subtractingfrom national income those types of incomeswhich are earned but not received and addingthose types that are received but not currentlyearned. So; Personal Income=NNP at factor cost undistributed Profits-corporate Taxes +Transfer Payments 7. Disposable Income: Disposable income is the total income thatactually remains with individuals to disposeoff as they wish. It differs from Personal Income by the amountof direct taxes Paid by individuals. Disposable Income =Personal Income Personal direct taxes. 8. Value Added: It is useful device to find out the exactamount that is added at each stage ofProduction to the value of final Product. It is the difference between the value ofoutput Produced by that firm and the totalexpenditure incurred by it on the materialsand the intermediate Products Purchased fromother business firm Thus , value added is obtained by deductingthe value of material inputs or intermediateproducts from the corresponding value ofoutput. 9. Value added= Total sales + closing stock of finished goods & semi finished goods-total Expenditure on raw materials and intermediate Products Opening stock of finished and semi finished goods. 10. Difficulties in Measurement of NationalIncome: NI is always measured in money , but thereare a number of goods and services ; whichare difficult to assessed in terms of money. NI is of double counting ;which arises fromthe failure to distinguish Properly between afinal and an intermediate Product. Income earned through illegal activities suchas gambling or illicit extraction of liquor isnot included in national income. 11. Difficulty of Transfer Payments in NI Capital gains or losses which accrue toProperty owners by increases or decreases inthe market value of their capital assets due tochanges in their demands . Price changes. 12. Problems of Measurement in developingcountries: Non monetised sector Lack of occupational specialization Non market transactions Illiteracy Non availability of data