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What is national income? Explain the relationship between national income and national product. |
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Answer» National income is defined as monetary value of production of final goods and services produced in a given period by a country. It can also be referred as increase in value of final goods and services. This increased value is distributed among owners of factors of production. Which, act as income of the owners. For example, land gets rent, labour gets wages or salaries, interest is received by capital and entrepreneurs receive profit. Payments made for resources are equal to increase the value of goods and services. So, national income equals to national product. |
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