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  • Formula of Income

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    CHONG
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    The document outlines two approaches to calculating national income - the income approach and the output approach. The income approach sums various sources of income like wages, profits, rents, and subtracts income paid abroad to calculate net national income. The output approach sums the value of goods and services from the primary, secondary, and tertiary sectors and makes similar international income adjustments to also determine net national income.

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    The document outlines two approaches to calculating national income - the income approach and the output approach. The income approach sums various sources of income like wages, profits, rents, and subtracts income paid abroad to calculate net national income. The output approach sums the value of goods and services from the primary, secondary, and tertiary sectors and makes similar international income adjustments to also determine net national income.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    6K views3 pages

    Formula of Income

    Uploaded by

    CHONG
    The document outlines two approaches to calculating national income - the income approach and the output approach. The income approach sums various sources of income like wages, profits, rents, and subtracts income paid abroad to calculate net national income. The output approach sums the value of goods and services from the primary, secondary, and tertiary sectors and makes similar international income adjustments to also determine net national income.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    of 3

    FORMULA of

    INCOME…
    INCOME APPROACH
    + Wages & Salaries (including compensation
    for employees)
    + Interests & dividends
    + Rent
    + Profit (including undistributed profit & income from self-
    employment/ proprietor`s income)
    = Gross Domestic Income at factor cost (GDIfc)
    – Income abroad
    + Income received from abroad
    = Gross National Income at factor cost (GNIfc)
    – Depreciation or capital consumption
    = Net National Income at factor cost (NNIfc)
    = National Income (NI)
    Output Approach
    Primary Sector
    + Secondary sector
    + Tertiary sector
    = Gross Domestic product at market price
    – Income paid abroad
    + Income received from abroad
    = Gross National Product at market price
    + Subsidies
    – Indirect business taxes / taxes on expentiture
    = Gross National product of factor cost
    – Depreciation
    = Net National Product at factor
    = National Income

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