net national income
   HOME

TheInfoList



OR:

In
national income A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted nat ...
accounting, net national income (NNI) is net national product (NNP) minus
indirect tax An indirect tax (such as sales tax, per unit tax, value added tax (VAT), or goods and services tax (GST), excise, consumption tax, tariff) is a tax that is levied upon goods and services before they reach the customer who ultimately pays th ...
es. Net national income encompasses the income of households, businesses, and the government. Net national income is defined as
gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...
plus net receipts of
wages A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', '' prevailing wage'', and ''yearly bonuses,'' and remuner ...
,
salaries A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis. F ...
and
property income Property income refers to profit or income received by virtue of owning property. The three forms of property income are rent, received from the ownership of natural resources; interest, received by virtue of owning financial assets; and profit, ...
from abroad, minus the
depreciation In accountancy, depreciation is a term that refers to two aspects of the same concept: first, the actual decrease of fair value of an asset, such as the decrease in value of factory equipment each year as it is used and wear, and second, the ...
of fixed capital assets (dwellings, buildings, machinery, transport equipment and physical infrastructure) through wear and tear and obsolescence. It can be expressed as :NNI = C + I + G + (NX) + net foreign factor income – indirect taxes – manufactured capital depreciation where: *C = Consumption *I =
Investment Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...
*G =
Government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual ...
*NX = net exports ( exports minus
imports An import is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. In international trade, the importation and exportation of goods are limited ...
) = (X – M) This formula uses the expenditure method of national income accounting. When net national income is adjusted for natural
resource depletion Resource depletion is the consumption of a resource faster than it can be replenished. Natural resources are commonly divided between renewable resources and non-renewable resources (see also mineral resource classification). Use of eith ...
, it is called ''Adjusted Net National Income'', expressed as :NNI* = C + I + G + NX + Net Foreign Factor Income – Indirect Taxes – manufactured capital depreciation – Natural Resource Depletion Natural resources are non-critical
natural capital Natural capital is the world's stock of natural resources, which includes geology, soils, air, water and all living organisms. Some natural capital assets provide people with free goods and services, often called ecosystem services. All of t ...
such as minerals. NNI* does not take critical natural capital into account. Examples are air, water, land, etc. For reference, capital (K) is divided into four categories: *K_m : manufactured capital (machines, factories, etc.) *K_h : human capital (workers' skills) *K_n : non-critical natural capital (minerals) *K_h* : critical natural capital (air, water)


See also

* National Income Accounting *
Gross domestic income The Gross Domestic Income (GDI) is the total income received by all sectors of an economy within a state. It includes the sum of all wages, profits, and taxes, minus subsidies. Since all income is derived from production (including the production o ...
*
Gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is of ...


References

{{DEFAULTSORT:Net National Income Gross domestic product