Macroeconomics Worksheet: National Income Accounting
2.2
THE IMPORTANT CONCEPTS IN NATIONAL INCOME ACCOUNTING
The total money value of all final goods and services Gross Domestic
Product (GDP)
produced within a country in a given time period.
The output produced by foreign workers in Malaysia such as by Indonesians or Nepalese will be included in the GDP.
The total market value of all final goods and services produced by the country's residents in a given time period.
Gross National Product (GNP)
The total amount of income earned by citizens of the country, regardless of where they.
Relationship between GDP and GNP Net factor income from abroad will be
Net factor income paid abroad will
included in the calculation of GNP.
be included in the calculation of
GDP. GNP = GDP + net factor income from abroad
GDP = GNP - net factor income from abroad
The market value of the net output of final goods and Net National Product (NNP) or National Income
services produced by a nation during a year.
The sum of GNP after deducts the value of capital consumption or depreciation during the year. Depreciation or capital consumption is a wear and tear on the economy’s stock of equipment and structures.
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