Keynes Three Deproach To National Income Approach?

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Register to read the introduction… Aggregate expenditure (on consumption and investment goods) approach. 2. Factor income approach. 3. Sale proceeds minus cost approach. Approaches to GNP There are three different approaches to GNP, namely income approach, expenditure approach and product approach. 1. Income approach In income approach, we find the different categories of Income namely; (1) Wages and salaries (2) Rents (3) Interest (4) Dividends (5) Undistributed corporate profits (6) Mixed incomes (7) Direct taxes (8) Indirect taxes (9) Depreciation (10) Net income from abroad. 2. Expenditure approach In expenditure approach, we find the different categories of expenditure namely, (1) Private consumption expenditure (2) Gross domestic private income (3) Net foreign income (4) Government expenditure on goods and services. 3. Product approach In product approach, we find the following categories of output. (1) Final market value of goods and services (2) Less cost of intermediate goods. The following factors are to be considered while calculating the GNP: 1. Only those goods and services which can be measured by Money. 2. Market price of final goods and services alone will be considered. 3. Services which are done free of cost are not considered. 4. Productions done in current year alone are considered. 5. Illegal activities are not included. GNP at Market Price If we multiply the total output produced in one year by their ‘Market Prices’, we get GNP at market price. Gross National Product at Factor Cost or Gross National Income The gross national product at factor cost is the difference between gross national product and net indirect taxes. It is also called gross national income. Gross national income is the sum total of compensation of employees, operating surplus, mixed income, depreciation and net factor income from …show more content…
Net Domestic Product at Market Price Net Domestic Product at market price is the market value of final goods and services produced by all the producers in the domestic territory of a country during an accounting year exclusive of consumption of fixed capital. It is equal to the net value added at market price. Net Domestic Income or Net Domestic Product at Factor Cost “NDI is the income generated in the form of wages, rent, interest and profit in the domestic territory of a country by all the producers (normal residents and non-residents) in an accounting year”(Hanson).
NDP at Factor Cost = NDP at Market Price – Indirect Tax + Subsidies

Private Income Central Statistical Organization defines Private Income as “the total of factor income from all sources and current transfers from the government and rest of the world accruing to private sector” or in other words the private income refers to the income from socially accepted source including retained income of corporation.
NI + Transfer Payments + Interest on Public Debt + Social Security – Profit and Surplus Public

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