ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Gross National Income (GNI) is the total amount of money earned by a nation’s people and businesses. It is used to measure and track a nation’s wealth from year to year. The number includes the nation’s gross domestic product (GDP) plus the income it receives from overseas sources.

Detailed explanation-2: -Description: Gross National Product (GNP) is Gross Domestic Product (GDP) plus net factor income from abroad. It measures the monetary value of all the finished goods and services produced by the country’s factors of production irrespective of their location.

Detailed explanation-3: -Moreover, GNI Formula = GDP + (inward remittances by businesses and individuals – outward remittance by the foreigners residing in the country.) Hence, the formula of GNI can be stated as the sum of gross domestic product and the difference between inward and outward remittance.

Detailed explanation-4: -Net foreign factor income (NFFI) is the difference between a nation’s gross national product (GNP) and gross domestic product (GDP). NFFI is generally not substantial in most nations since payments earned by citizens and those paid to foreigners more or less offset each other.

Detailed explanation-5: -By income approach, Value added = Compensation of employees + Mixed income + Other taxes less subsidies on production + Gross operating surplus. With: Gross operating surplus = Net operating surplus + Consumption of fixed capital.