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National Income (Definition (Real value of the output of goods and…
National Income
GDP
Definition:: Sum of the monetary value of all final goods and services produced within the domestic terrirory of the country during a specific period of time and sold in organized markets
Goods and services are assumed to be newly produced, used goods are not included, as they were already included in previous GDPs
GNP
Definition:Market value of all final goods and services produced by factors that are owned by residents irrespective of whether the factors are located within the geographical boundary of the country or abroad.
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Definition
Real value of the output of goods and services produced by the economy over a period of time / total income earned by the nation over a period of time.
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Shows progress or deterioration of standard of living over time,
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Inflation causes GPL to rise over time, causing nominal value to be exaggerated
Hence, there is a need for a GDP price deflator to remove the effects of inflation.
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