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Bhubaneswar

PPT On National Income

Home > PowerPoint Slides > PPT On National Income
Published in: Economics
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Economics CBSE class 12th National income and related aggregates

Praveen T / Ranchi

6 years of teaching experience

Qualification: M.A (Dr Ram Manohar Lohia Avadh University , Faizabad - 2016)

Teaches: Economics

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  1. CERCULAR FLOW OF INCOME PRODUCTION INCOME EXPENDITURE GENERATION An economy consists of basic • economic activities production, consumption and investment. Production gives rise to income, income gives to demand for goods and services and demand is turn to give rise to expenditure and expenditure leads to production farther. • It is called a circular flow as this is a continuous process; thege is iVbecaus -.ihere IS no end to human
  2. Considering the three phases together, we find that in a two sector (house hold and business) economy: Triple Identity Value added (the value of final goods and services) Income generation Expenditure on the final goods and services. 1 2 The triple identity suggests that domestic/national income can be viewed from three ways As the sum total of value added by all producing units in the economy(= market value of final goods and roduced in the econom durin the eriod of an accountin ear As the sum of total of factor incomes generated in the economy during the period of an accounting year. As the sum total of expenditure on the final goods and services produced in the economy during an accounting 2 year.
  3. Accordingly, national income of a country can be measured by three different methods: ' Value added / Output Method 1 ' Income/Distribution Method 2 Expenditure/Disposition Method 3
  4. ' Income/Distribution Share or Factor Payment Method National Income is estimated as the sum total of factor incomes earned by the normal residents of the country during an accounting year. Domestic Income(at Factor Cost) + NFIA = National Income FACTOR OF PRODUCTION FACTOR PAYMENT LAND RENT LABOUR WAGES SALARY CAPITAL INTEREST ENTREPRENEUR PROFIT 0 BY FIRM o It refers to all factor payment made by the producing unit to the factors of production for rendering productive services in the production of goods and services. FACTOR INCOME OF HOUSEHOLD FACTOR INCOME
  5. Calculation of Domestic Factor Income (NDPFO NDPFC Rent Free Accomodation TA/DA Medical Facilities Undistributed Profit Retained Earning C.O.E Compensation of Employee Wages in Cash Wages in Kind — Emp oyer s Contribution in Social Security Schemes Dividends Corporate Tax Corporate Savings o.s Operating Surplus Rent, Royalty Interest Profit Mixed Income Income of Self Employed
  6. Transfer income will not be included. Income from sales of second Hand goods will not be included. Income from sales of shares and bonds (financial assets) is not included. Windfall gains will not be included. 02 03 04 09 10 Imputed value of owner — occupied houses is included as houses renders services. Precautions Production of goods and fixed assets for self — consumption by producing units will be included. 05 06 07 08 Illegal income will not included. Payments out of accumulated savings are not included. Indirect taxes are not included. Interest paid by production units on capital borrowed is included.*
  7. THANK YOU -By Praveen Tiwari

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