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Difference/link between national PRODUCT and national INCOME

BrownieLover

What's the distinction between them?

Reply 1

KrystalDia

Original post by BrownieLover

What's the distinction between them?

The total value of production generated by the resources that belongs only to the citizens of a country is called national output or national product. What's important is whether the production was done by a local or a foreigner.

National Product = Domestic Production-Net Foreign Factor Income(Foreign receipts-Payment to foreign factors)

There are 2 methods to calculate national income,
1)Calculating national Income from production method.
2)Calculating national income from income method.

National income of a country depends on national product. National product is the factor which generates national income. In other words, Net National Product(@ Factor Cost)=National Income.

Hope this would help you.