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National income accounting is a system used by economists to measure the economic performance of a country. It involves the systematic recording of all economic transactions and the calculation of various economic indicators such as GDP, GNP, NNP, and NI.
The concept of national income accounting was formalized during the 20th century. The first comprehensive system of national accounts was developed in the United States in the 1930s. This system has since been adopted and refined globally.
1. **Gross Domestic Product (GDP)**: The market value of all final goods and services produced within a country in a given period.
2. **Net National Product (NNP)**: GDP minus depreciation, reflecting the net output of an economy.
3. **National Income (NI)**: The total income earned by factors of production, including wages, rents, interest, and profits.
4. **Personal Income (PI)**: The income received by households, including wages, dividends, and rent.
5. **Disposable Personal Income (DPI)**: The income available to households after taxes, used for consumption and savings.
There are no landmark judgments related to national income accounting as it is more of an economic concept rather than a legal one.
There are no specific amendments related to national income accounting.
| Feature | GDP | NNP |
|---------|-----|-----|
| Definition | Total market value of all final goods and services produced | GDP minus depreciation |
| Scope | Domestic production | National production including net income from abroad |
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Gross Domestic Product (GDP) - the total market value of all final goods and services produced in a country in a given period.
Net National Product (NNP) - GDP minus depreciation.
National Income (NI) - the total income earned by a country's factors of production in a given period.
Personal Income (PI) - the total income received by individuals and households.
Disposable Personal Income (DPI) - the amount of money that households have available for spending and saving after income taxes have been accounted for.
Income Method - calculates national income by adding up all incomes earned by factors of production.
Expenditure Method - calculates national income by adding up all expenditures made in an economy.
Output Method - calculates national income by adding up the value of all final goods and services produced.
I.E.O - Income, Expenditure, Output
C.I.G.N.E - Consumption, Investment, Government spending, Net Exports
G.N.P.D - Gross, Net, Personal, Disposable