National Income

National Income

National Income, the sum of the values of all the goods and services made available in any period for consumption or for adding to wealth. It may be calculated as the sum of incomes or of expenditures, which must be equal to each other since all expenditure in a country must generate incomes in equal amount.

The national income is the total of incomes of all residents, companies and Government bodies derived from current economic activity in the production of goods and services. Some incomes are not matched by current economic activity, e.g. old age pensions, national insurance benefits, family allowances, interest on the National Debt. They are called 'transfer payments' or 'transfer incomes' because the purchasing power they give the recipients has been obtained at the expense of other income-receivers who are taxed to provide them. Transfer payments are therefore excluded from the national income. All other incomes, such as wages , salaries, interest, profit, dividends, rents, the undistributed profits and surpluses of companies and public corporations, the incomes of Government employees and the armed forces, are included. Some incomes arise from dividends and interest from investments abroad, and part of the incomes arising within the country is paid abroad as interest and dividends to non-residents. To the incomes arising at home (the domestic national product) is added income received from abroad (e.g. dividends on investments), less income paid abroad (dividends on investments at home owned by people in other countries), to obtain the total national income.

Economic - Economic Geography

Since then his writings have in turn been increasingly reinterpreted as a special case both by some followers and by some economists who had not wholly accepted his writings. The content of economics is in a state of change, and this site is therefore not a final statement of economic doctrine.

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