GDP vs National Income
“GDP” or Gross Domestic Product and National Income are financial terms that are related to the finance of a country.
National Income is the total value of all services and goods that are produced within a country and the income that comes from abroad for a particular period, normally one year.
Gross Domestic Product is defined as the value of the goods and services generated within a country. The GDP, which is based on ownership, measures the overall economic output of a country. The GDP also determines the local income of a nation. The National Income determines the overall economic health of the country, trends in economic growth, contributions of various production sectors, future growth and standard of living.
Gross Domestic Product, Gross National product, and Gross National Income are the factors that determine the national income. Generally, these three methods are used to determine National Income. The product or output method is a method that evaluates the overall value of services generated by the country. The income method takes into account the overall income from various means of production. Then there is the expenditure method where the sum of all expenditures incurred is taken into account.
In the calculation of GDP, many factors, such as, services and goods produced, exports, and government/private spending are used. In a very simple formula, the GDP can be calculated. The general formula for determining GDP is C + G + I + NX where “C” is the National Consumer Spending, “G” is the total government spending, “I” is the amount of business capital, and “NX” is net exports minus total imports.
Summary:
1.National Income is the total value of all services and goods that are generated within a country and the income that comes from abroad for a particular period, normally one year.
2.Gross Domestic Product is defined as the value of the goods and services generated within a country.
3.Gross Domestic Product, Gross National Product, and Gross National Income are the factors that determine the national income. Generally, these three methods are used to determine National Income.
4.In the calculation of GDP, many factors, such as, services and goods produced, exports, and government/private spending are used.
5.The GDP, which is based on ownership, measures the overall economic output of a country. The GDP also determines the local income of a nation. The National Income determines the overall economic health of the country, trends in economic growth, contribution of various production sectors, future growth and standard of living.