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    Notes 201002 215516 440 PDF

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    sharique alam
    National income and GNP can be calculated at constant or current prices. National income at constant prices, also called real national income, uses base year prices to account for fluctuations in production, while current prices account for production and price changes. GNP at constant prices uses base year prices and is called real GNP, while GNP at current prices uses current year prices and is called nominal GNP. The GNP deflator measures average price levels by comparing nominal and real GNP. Green GNP makes adjustments to traditional GNP calculations to account for environmental degradation and resource depletion costs.

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    Notes 201002 215516 440 PDF

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    National income and GNP can be calculated at constant or current prices. National income at constant prices, also called real national income, uses base year prices to account for fluctuations in production, while current prices account for production and price changes. GNP at constant prices uses base year prices and is called real GNP, while GNP at current prices uses current year prices and is called nominal GNP. The GNP deflator measures average price levels by comparing nominal and real GNP. Green GNP makes adjustments to traditional GNP calculations to account for environmental degradation and resource depletion costs.

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    National income and GNP can be calculated at constant or current prices. National income at constant prices, also called real national income, uses base year prices to account for fluctuations in production, while current prices account for production and price changes. GNP at constant prices uses base year prices and is called real GNP, while GNP at current prices uses current year prices and is called nominal GNP. The GNP deflator measures average price levels by comparing nominal and real GNP. Green GNP makes adjustments to traditional GNP calculations to account for environmental degradation and resource depletion costs.

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    Notes 201002 215516 440 PDF

    Uploaded by

    sharique alam
    National income and GNP can be calculated at constant or current prices. National income at constant prices, also called real national income, uses base year prices to account for fluctuations in production, while current prices account for production and price changes. GNP at constant prices uses base year prices and is called real GNP, while GNP at current prices uses current year prices and is called nominal GNP. The GNP deflator measures average price levels by comparing nominal and real GNP. Green GNP makes adjustments to traditional GNP calculations to account for environmental degradation and resource depletion costs.

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    National Income at Constant Price:

    (a) If national income is calculated on the basis of base year price index, then it is known as
    National income at constant price.
    (b) It is also called Real National Income as it fluctuates due to the fluctuation in the flow of
    goods and services and price remains constant.
    2. National Income at Current Price:
    (a) If National Income is calculated on the basis of current year price index, then it is known
    as national income at current price.
    (b) It is also called Monetary National Income as it fluctuates due to the fluctuation in the
    flow of goods and services along with the price of the commodity.
    3. GNP at current MP: When final goods and services included in GNP are valued at current
    MP, i.e., prices prevailing in the year for which GNP is being measured, it is called GNP at
    current MP or Nominal GNP.
    4. GNP at constant MP: When final goods and services included in GNP are valued at constant
    prices, i.e. prices of the base year, it is called GNP at constant MP or Real GNP.
    5. GNP Deflator: GNP Deflator measures the average level of the prices of all the final goods
    and services that are produced within the domestic territory of an economy including NFIA.
    GNP deflator is measured as the ratio of nominal GNP to real GNP, multiplied by 100.

    6. Green GNP: Green GNP refers to GNP adjusted for loss of value due to,
    (a) Environmental degradation; and
    (b) Depletion of natural resources on account of overall production activity in the
    economy.

    Last modified: 25 Sep 2020

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