Meaning of National Income Concepts And Their Uses - SS2 Economics Lesson Note

National income concepts are used to measure a country's economic performance and to compare it with other countries. They provide policymakers with important information about the size and structure of the economy, including its strengths and weaknesses. Important national income concepts include: Gross Domestic Product (GDP), Gross National Product (GNP), and Net National Product (NNP).

Gross Domestic Product (GDP)

Gross Domestic Product (GDP) is the total value of all goods and services produced within a country's borders in a specific period. It measures the economic output of a country and is used to track changes in the economy over time.

 

Gross National Product (GNP)

Gross National Product (GNP) is the total value of all goods and services produced by a country's residents, both domestically and abroad, in a specific period. It measures the economic output of a country's citizens and is used to compare the economic performance of different countries.

 

Net National Product (NNP) 

Net National Product (NNP) is the total value of all goods and services produced by a country's residents, both domestically and abroad, minus depreciation. Depreciation is the wear and tear on capital goods such as factories, machinery, and equipment. NNP takes into account the loss of value due to depreciation and provides a more accurate picture of a country's economic output.