DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH

Name : R. Mohan
Designation : Head of ccp
Branch : commercial &
computer practice
Institution : GMR. Polytechnic
Gajwel
Year/Semester : III year/ VI th semester
Subject : Business Economics II
Subject Code : CCP-602.
Topic : National Income
Sub-topic : Components of NI
Duration : 50 minutes.
Teaching Aids : PPts Animation
CCP602.34 1
Objectives:

On completion of the topic you would be able

to

 Know the various Components of National Income

 Calculation of PCI and PI

 Disposal Income

CCP602.34 2
Recap:

GNP is the money value of the total national

production for any given period of time.

NNP refers to the Net production of goods and

services.

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Components of National Income

The other two components of National

Income are :

PCI = Per capital Income

PI = Personal Income

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 Per capita Income. (PCI)

The Per capita Income is obtained by dividing the

national income with total population.

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 Personal Income (PCI)

The total of incomes received by all persons from all

sources.

It consists of

 Wages and salaries

 Interest, rent & dividends received by individuals

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 Personal Income (PI) Contd..

It also includes mixed income of

 Self - employed Persons
 All transfer income received from public authorities.

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 Calculation of PI

Personal Income + ( national income ) – ( Corporate

income Taxes undistributed corporate profits) –

( Social Contribution) + ( Transfer payments)

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 Needs of PI

 Help us to

 Estimate the potential purchasing powers of house –

holds in the country.

 Estimate the welfare of the consumers

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 Disposal Income

A part of personal income paid to government in the form

of taxes.
The remaining personal Income is called disposal Income
DI = Personal – Personal taxes
DI = Consumption + savings.

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Summary:
 Per capital income is the income arrived at by

dividing the national income with total population

 Personal Income is the income received by

individuals in a country.

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Quiz:

2) The income obtained by dividing the national income with total

population is _________

3) _________ is the income received by individuals in a country

during a year .

Answer : 1) Per Capita Income 2) Personal Income

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 Frequently Asked Questions

3) Define Per Capita Income and Personal Income

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ASSIGNMENT:

2. Write short notes about Per capita Income

3. Write short notes on Personal income.

4. Given the procedure to find the personal Income.

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