national income
Quick Summary
National income accounting is a system for measuring a country's income and production. It can be calculated as the total value of goods and services produced in a period, or as the total income generated from economic activity after accounting for capital consumption.1
The most common measure is the gross national product (GNP), which represents the total market value of all final goods and services produced by a nation's economy in a given time. National income is derived from GNP by subtracting indirect taxes and depreciation. It reflects the aggregate earnings from a nation's current production, including employee compensation, interest, rent, and business profits after taxes. While valuable for economic planning, national accounting involves estimations and can have margins of error, making direct international comparisons potentially misleading.123
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