The national income is an important in economics.The flow of goods and service available to a country during a year is called national product.The money value of the goods and services produced in a country during a year is called national income.A country is high national income is said to be a prosperous country.
There are three popular definition of national income,which have been described below.
According to Alfred Marshall -:The labour and capital a country acting upon natural resources produce annually,a certain net aggregate of commodities material immaterial including service of all kinds.This is the net annual income or revenue of country or the national dividend".
In the world of A.C. Pigou -"The national dividend is that part of the objective income of the community including of course,income dividend from aboard,which can be measured in money.
According to Irving fisher -"The true national income is that part of annual net produce which is directly consumed during that year".
The definition Marshal and Piguo are based on production.On the other hand,the definition of Fisher is based on consumption.It is practically difficult to measure national income on the basic of the definition based on consumption.Hence,the product-based definition of Marshal and Piguo are regarded more acceptable.
There are three popular definition of national income,which have been described below.
According to Alfred Marshall -:The labour and capital a country acting upon natural resources produce annually,a certain net aggregate of commodities material immaterial including service of all kinds.This is the net annual income or revenue of country or the national dividend".
In the world of A.C. Pigou -"The national dividend is that part of the objective income of the community including of course,income dividend from aboard,which can be measured in money.
According to Irving fisher -"The true national income is that part of annual net produce which is directly consumed during that year".
The definition Marshal and Piguo are based on production.On the other hand,the definition of Fisher is based on consumption.It is practically difficult to measure national income on the basic of the definition based on consumption.Hence,the product-based definition of Marshal and Piguo are regarded more acceptable.
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