What is GDP, GNP, Per Capita Income & National Income?

What is GDP, GNP, Per  Capita Income AND National Income?


The Gross Domestic Product (GDP) is a measure of all of the services and goods produced in a country over a specific period; classically a year.


Gross National Product is measured as GDP plus income of residents from investments made abroad minus income earned by foreigners in domestic market.

National Income

National Income is the money value of all goods and services produced in a country during the year.The national income of a country, or region, divided by its population is called Per Capita Income. Per capita income is often used to measure a country’s standard of living.

Indicators of GDP, GNP & NATIONAL INCOME Growth

Gross Domestic Product (GDP) — It is the sum total of the market value of the final goods and services produced within the geographical boundary of a country during an accounting year.

Gross National Product (GNP)

GNP = GDP + Net factor income from abroad — Net factor income = X – M, where X = Income earned and received by nationals in foreign countries & M = Income earned by foreign nationals in a country. It better indicates the production potential of the nationals as against GDP. In India’s case, GNP is less than GDP. In other words, net factor income i.e. (X – M) is negative in India.

Net National Product (NNP)

NNP = GNP – Depreciation — Depreciation is consumption of fixed capital in the process of production.

National Income — When NNP is calculated at factor cost, it is known as National Income. In other words, it can be represented as: National Income = NNP at market prices – Indirect taxes + Subsidies

COURTESY Ms Gazal Shailya Srivastava

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Maha Gupta

Maha Gupta

Founder of www.examscomp.com and guiding aspirants on SSC exam affairs since 2010 when objective pattern of exams was introduced first in SSC. Also the author of the following books:

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