Net National Income (Nni)
Economics notes
Net National Income (Nni)
➡️ Gross Domestic Product (GDP): GDP is the total value of all goods and services produced within a country's borders in a given period of time. It is the most commonly used measure of economic activity.
➡️ Net Domestic Product (NDP): NDP is the total value of all goods and services produced within a country's borders in a given period of time, minus the value of any intermediate goods used in the production process.
➡️ Net National Income (NNI): NNI is the total value of all goods and services produced within a country's borders in a given period of time, minus the value of any intermediate goods used in the production process, plus any income earned from abroad. It is the most comprehensive measure of economic activity.
What is Net National Income (NNI) and how is it calculated?
Net National Income (NNI) is the total income earned by a country's residents and businesses, minus any depreciation of capital goods. It is calculated by subtracting depreciation from Gross National Income (GNI).
How does Net National Income (NNI) differ from Gross National Income (GNI)?
Gross National Income (GNI) is the total income earned by a country's residents and businesses, regardless of where they are located. Net National Income (NNI) is GNI minus any depreciation of capital goods. Therefore, NNI provides a more accurate measure of a country's economic output, as it takes into account the wear and tear on capital goods.
What are the limitations of using Net National Income (NNI) as a measure of economic well-being?
While NNI is a useful measure of a country's economic output, it has some limitations. For example, it does not take into account non-monetary factors such as environmental degradation or income inequality. Additionally, it does not reflect the distribution of income within a country, which can have important implications for social welfare. Finally, NNI may not accurately capture the economic activity of informal sectors or underground economies.