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# How to calculate national income

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National income is the annual value of goods produced and services provided.

It is characterized by the value added by production in the given year to the well-being of society.

Instructions

1

Before proceeding to the calculation of the nationalIncome, you should know that the total income of a country depends not only on the results of domestic production activities, but also on income received from abroad and paid abroad. The amount of primary income, determined on the basis of the gross domestic product, representing the volume of goods and services produced by residents, differs from the incomes received by that country. This difference will be the balance of primary incomes transferred abroad and received because of it. The total amount of primary incomes, taking into account this difference, will constitute the gross national income.

2

Gross national income can be calculated by the following formula:
GNI = GDP + SDD + SOT + SDS + SH + SC, where
GDP - gross domestic product-
SPD - balance of primary incomes received by residents from abroad and paid to non-
SOT - balance of payment received by residents from abroad and paid to non-
SDS - the balance of income from property received by residents from abroad and paid to non-
SN - balance of taxes on production received by residents from abroad and paid to non-
SC - balance of subsidies for production received by residents from abroad and paid to non-residents.

3

Net national income is defined as the difference between gross national income and the value of consumption of fixed capital, i.e. Depreciation of fixed assets.

4

In addition, there is a grossDisposable national income. It is the sum of gross national income and the balance of transfers received from non-residents and committed abroad. By transfers is understood the sum of gratuitous transfers (donations, donations, humanitarian aid).

5

Net national disposable income isThe difference between gross disposable national income and depreciation of fixed capital. This indicator describes the amount of income that residents can use for consumer spending or savings.

How to calculate national income Was last modified: May 21st, 2017 By
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