Give reason "Paid services are included in national income".
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modern economies is the influential and active role undertaken by government.
8.1 Introduction
The Concept of national income occupies an important place in economic theory. National income is one of the important subject matters of Macro Economics. National income is an uncertain term, which is used interchangeably with national dividend, national output and national expenditure.
National income .is the flow of goods and services, which become available to a nation during the year. To be more precise, national income is the aggregate money value of all final goods and services produced in a country during one year. As an indicator of economic health and as an instrument of economic analysis, national income computation is of great importance to the economists.
The total economic performance of a nation is evaluated with the help of national income data. The basic purpose of national income accounting is to measure the aggregate output and income, and provide a basis for the government to formulate their policy programmes, to maximize the national welfare of the people. In India, since 1955, the responsibility for the calculation of national income rests with the Central Statistical Organization (C.S.O.).
Meaning :
In common, national income means the total value of goods and services produced annually in a country. In other words, the total amount of income accruing to a country from economic activities, in a year's time is known as national income. It includes payments made to all resources in the form of rent, wages, interest and profits.
Thus, national income is the aggregate monetary -value of all final goods and services produced-in the, economy in a year.
Definitions of National Income:
Dr. Marshall's Definition
Marshall's definition represents a total value of production - it is from production end.
According to Marshall, "The labour and capital of a country acting on its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds.... This is the true net annual income or revenue of the country or national dividend."
Prof. Pigou's Definition
Pigou's definition of national income represents a receipts total production end.
According to Pigou, the national dividend is that part of the objective income of the community, including of course income derived from abroad, which can be measured in money:
8.1 Introduction
The Concept of national income occupies an important place in economic theory. National income is one of the important subject matters of Macro Economics. National income is an uncertain term, which is used interchangeably with national dividend, national output and national expenditure.
National income .is the flow of goods and services, which become available to a nation during the year. To be more precise, national income is the aggregate money value of all final goods and services produced in a country during one year. As an indicator of economic health and as an instrument of economic analysis, national income computation is of great importance to the economists.
The total economic performance of a nation is evaluated with the help of national income data. The basic purpose of national income accounting is to measure the aggregate output and income, and provide a basis for the government to formulate their policy programmes, to maximize the national welfare of the people. In India, since 1955, the responsibility for the calculation of national income rests with the Central Statistical Organization (C.S.O.).
Meaning :
In common, national income means the total value of goods and services produced annually in a country. In other words, the total amount of income accruing to a country from economic activities, in a year's time is known as national income. It includes payments made to all resources in the form of rent, wages, interest and profits.
Thus, national income is the aggregate monetary -value of all final goods and services produced-in the, economy in a year.
Definitions of National Income:
Dr. Marshall's Definition
Marshall's definition represents a total value of production - it is from production end.
According to Marshall, "The labour and capital of a country acting on its natural resources produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds.... This is the true net annual income or revenue of the country or national dividend."
Prof. Pigou's Definition
Pigou's definition of national income represents a receipts total production end.
According to Pigou, the national dividend is that part of the objective income of the community, including of course income derived from abroad, which can be measured in money:
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The reason behind "Paid services are included in national income" is as follows:
- National income includes paid service because it includes only paid service values . As example- service of doctor, lawyers, mobile, railway etc.
- Services which are not paid, is not included in national income such as charity, sympathy, love etc.
- Country's income is measured by gross national income. This income comes from residents and business of country, earning from abroad.
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