(1) Gross Domestic Product at Market Price (GDP at MP):Gross domestic product at market price is the aggregate money

value of the final goods and services

produced within the country's own territory. So as to calculate GDP at MP all goods and services
produced in the domestic territory are multiplied by their respective prices. Symbolically GDP at MP
= PXQ. Where P is market price and Q is final goods and services. GDP includes only those goods
which come to the market for sale. The values of final goods are only expressed in money terms.
Value of depreciation and transfer payments are not included in GDP at MP. The value of second
hand goods is excluded from gross domestic product.
[Gross Domestic Product at Market Price = value of gross domestic output - value of intermediate
consumption]
(2) Gross National Product of Market Price (GNP at MP):Gross national product at market price is broade and comprehensive concept. GNP at MP measures
the money value of all the final products produced annually in a counter plus net factor income from
abroad. In short GNP is GDP plus net factor incomes earned from abroad. Net factor incomes is
derived by reducing the factor incomes earned by foreigners from the country, in question from the
factor incomes earned by the residents of that country from abroad.
[Gross National Product at Market Price = Gross domestic product at market price + Net factor
income from abroad.]
(3) Net Domestic Product at Market Price (NDP at MP):Net domestic product- at market price is the difference between Net National Product at market
price and net factor income from abroad. Net domestic product at market price is the difference been
GNP at market price minus depreciation and net factor incomes from abroad.
[Net Domestic Product at Market Price = GNP at MP - Depreciation - Net factors income form
abroad]
(4) Net National Product at Market Price (NNP at MP):Net National product measures the net money value of final goods and services at current prices
produced in a year in a country. It is the gross national product at market price less depreciation. In
production of output capital assets are constantly used up. This fixed capital consumption is called
depreciation. Depreciation constitutes loss of value of fixed capital. Thus net national product is the
net money value of final goods and services produced in the course of a year. Net money value can be
arrived at by excluding depreciation allowance from total output.
[NNP at MP = GNP at MP - Depreciation]

(5) Net Domestic Product at Factor Cost (NDP at FC):Net Domestic product of factor cost or domestic income is the income earned by all the factors of
production within the domestic territory of a country during a year in the form of wages, interest,
profit and rent etc. Thus NDP at FC is a territorial concept. In other words NDP at factor cost is equal
to NNP at FC less net factor income from abroad.
[NDP at FC = NNP at FC - Net factor income from abroad]
(6) Net National Product at Factor Cost (NNP at FC)
Net national product at factor cost is the aggregate payments made to the factors of production. NNP
at FC is the total incomes earned by all the factors of production in the form of wages, profits, rent,
interest etc. plus net factor income from abroad. NNP at FC is the NDP at FC plus net factor income
from abroad. NNP at FC can also be derived by excluding depreciation from GNP at FC.
[NNP at FC = NDP at FC + Net Factor Income from abroad]
(7) Gross Domestic Product at Factor Cost (GDP at FC):
Gross Domestic Product at factor cost refers to the value of all the final goods and services produced
within the domestic territory of a country. If depreciation or consumption of fixed capital is added to
the net domestic product at factor cost, it is called Gross domestic Product at Factor cost.
[GDP at FC = NDP at FC - Depreciation]
(8) Gross National Product at Factor Cost (GNP at FC):Gross national product at factor cost is obtained by deducting the indirect tax and adding subsidies
to GNP at market price or Gross national Product at factor cost is obtained by adding net factor
incomes from abroad to the GDP at factor cost.
[GNP at FC = GNP at MP - Indirect tax + Subsidies] or, [GNP at FC = GDP at FC + Net Factor
Income from abroad]
(9) Private Income:Private income means the income earned by private individuals from any source whether productive
or unproductive. It can be arrived at from NNP at factor cost by making certain additions and
deduction. The additions include (a) transfer earnings from Govt, (b) interest on national debt (c)
current transfers from rest of the world. The deductions include (a) Income from property and
entrepreneurship (b) savings of the non- departmental undertakings (e) social security
contributions. In order to arrive at private income the above additions and subtraction are to be
made to and from NNP at factor Cost.

[Private Income = NNP at FC + transfer payments + Interest on public debt - social securities profits and surpluses of public undertakings]
(10) Personal Income:Personal Income is the total income received by the individuals of country from all sources before
direct taxes. Personal income is not the same as National Income, because personal income includes
the transfer payments where as they are not included in national income. Personal income includes
the wages, salaries, interest and rent received by the individuals. Personal income is derived by
excluding undistributed corporate profit taxes etc. from National Income.
[Personal Income = Private Income - Saving of Private enterprise - Corporate tax]
(11) Disposable Income:Disposable income means the actual income which can be spent on consumption by individuals and
families. It refers to the purchasing power of the house hold. The whole of disposable income is not
spent on consumptions; a part of it is paid in the form of direct tax. Thus disposable income is that
part of income, which is left after the exclusion of direct tax.
[Disposable Income = Personal Income - Direct tax]

National Income :According to Prof. A.C Pigon " National income is that part of the objective income of the community
including of course income derived from abroad which can be measured in money."
Prof. Marshall says " People of any country produce a specific quantity of different goods and services
from the natural resources by the help of capital goods with in specific period i.e. usually one year and
this is called national in come of the country.
National income is always indicated in monetary term. National income is the total value of those goods
and services which are produced in the country during a particular year. It includes agriculture, mineral
and industrial production, various services are also included.
VARIOUS CONCEPTS OF NATIONAL INCOME
1. Gross National Product or Gross National Income :CAMBELL says, " Gross national income of product is defined as the total market value of all the final
goods and services produced in a year."
Two points are very important :1. The value of various goods and services should be measured in terms of money .
2. We should consider the value of final shape of goods. For example calculate the value of cloth instead
of cotton.
The market value of the following production is included in the gross national product.
1. Total industrial production.
2. Total mineral production.
3. Total agriculture production.
4. Total services.
Economist generally use expenditure approach to calculate GNP of a country. In this approach following
expenditure is included to measure the gross national product.
1. Govt. expenditure on goods and services.
2. Personal domestic private investment.
3. Personal consumption expenditure.
4. Net foreign investment.
5. Export surplus.
6. Gross domestic public investments.
Explanation :- Govt. expenditure has also two kinds, consumption expenditure and capital
expenditure.So both are included in GNP. On the other hand people of the country's expenditure has also
two kinds consumption and investment these two expenditure of the people are also included in the GNP.
Export surplus is obtained by deducting the value of imports from the value of exports. Net foreign

investment is the difference between the incoming capital for investment and out going capital for
investment.
2. Net National Product (NNP) , or Net National Income (NNI) :Net money value of all the goods and services produced in a country during a year is called Net National
Income. If we deduct the depreciation allowance from gross national product , we can get national product
at current market price. Now we should explain the meaning of depreciation when we use the machines
and equipments to produce the goods their value goes on decreasing due to wear and tear. At one stage
these are worn out and new machinary is replaced. The fund which is set a side for covering the wear and
tear of the machinary is called depreciation allowance.
Example :- Suppose one person buys a powerloom for the production of cloths for Rs. 10,000 only. He
expects that this machinary will work only for years. It means that by the use of this machinary, it will
loose its value eqaul to Rs. 1000 per year. He will set a side Rs. 1000 every year from the gross national
income as a depreciation allowance every year. After ten year he will be able to purchase a new
machinary to replace the old one.
Net National product = Gross National product - Depreciation
NNP = GNP - Depreciation
3. Gross Domestic Production (GDP) :Gross Domestic product is the value of goods and services produced in the country during a year minus
the value of inputs.
GDP = Total value of all the goods and services produced value of inputs.
Difference in GDP and GNP :- Gross national product represent Gross Domestic product Plus (+) net
factor income/payments from to abroad.
GNP = GDP + Income recived from abroad.
4. National Income or N.I :National income or National income at factor cost means the aggregate earnings of the four factors of
production ( Land, labour , capital and organization).
So National income = Rent + Wages + Interest + Profit.
National income is the money value of all the goods and services produced in the country, during a one
year. These goods and services are produced by the four factors of production.
We can also find national income by deducting the indirect taxes and adding the subsidies to NNP.
NI = NNP - Indirect taxes + Subsidies + Transfer payments + Statistical Discripancy.
1. Govt. Subsidies :- Some times govt. provides help to any particular sector of the economy and it
contributes the money, such contributes the money, such contribution is called govt. subsidies suppose
govt purchases the wheat from the farmer at the price of Rs. 200 per 40 kg and sells to the people at the
rate of Rs. 150 so fifty ruppes is a subsidy, it will also be included in national income.

2. Indirect Taxes :- Sales tax and excise duty are indirect taxes, these are deducted to calculate the
National Peroduct.
3. Transfer Payments :- Charity, Zakat, Pension and Scholorships are called transfer payments, these
are also deducted to calculate NNP.
4. Statistical Discrepancy :- There are three methods of measuring the NI so if there is difference in the
result of the three methods, such type of discrepency should be deducted to arrive at the same result.
5. Personal Income :- The income recieved to all individuals and households during a year in a country
is called personal income. The aggregate of personal income is also called the national income. But all
the income items which are included in national income are not paid to the individuals as income. For
example corporate profits and corporate taxes. While there are certain transfer payments like Zakat which
are not included in national income, but there are income of the individuals. So these are added up to
calculate the personal income.
Personal income = National income - Corporate profits, Corporate taxes + Transfer payments.
6. Disposable personal income :- Personal income minus all taxes paid to the government is called the
disposable personal income. A person can spend disposable personal income as he likes.
Disposable personal income - Personal income - personal taxes
OR
DPI = Consumption + savings.
A person can save or consume his disposable income. So this income is usually divided into two parts,
consumption ansd saving.