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4) Net National Product (NNP) : Net National
Do you know?
Product is the net market value of all final
I) Three Sector Model of Circular Flow goods and services produced by the residents
of National Income : Under a three sector of a country, during a period of one year.
model, the government sector is added to ∴ NNP = GNP – Depreciation.
the existing two sectors i.e. households and
business firms. Find out :
II) Four Sector Model of Circular Income : India’s GDP data.
In an four sector model, foreign sector
is added to the existing three sectors You should know :
i.e. households, business firms and Concept of Green GNP :
government sector. It is defined as, “Green GNP is an
indicator of sustainable use of natural
Different Concepts of National Income : environment and equitable distribution of
Following are some of the important benefits of development.”
concepts related to national income. Gross National product does not take
1) Gross Domestic Product (GDP) : Gross into consideration the cost in terms of (i)
Domestic Product is the gross market value Environmental pollution, (ii) Depletion of
of all final goods and services produced natural resources caused by production of
within the domestic territory of a country, output. Mere increase in GNP will not reflect
during a period of one year. improvement in quality of life, when it
∴ GDP = C + I + G + (X-M) , increases environmental pollution or reduce
available resources for future generations.
Where C = Private consumption expenditure
So Green GNP has been introduced while
I = Domestic Private Investment measuring economic welfare.
G = Government's consumption and Investment Following are the characteristics of Green
Expenditures GNP :
X - M = Net export value (Value of Exports - 1) Sustainable economic development, i.e.
Value of imports development which should not cause
2) Net Domestic Product (NDP) : Net environmental degradation (pollution)
Domestic Product is the net market value and depletion of natural resources.
of all final goods and services produced, 2) Equitable distribution of benefits of its
within the territorial boundaries of a development.
country, during a period of one year. 3) Promotes economic welfare for a long
period of time.
∴ NDP = GDP – Depreciation.
Measurement :
3) Gross National Product (GNP) : Gross Green GNP = GNP - (Net fall in stock of
National Product means the gross value of natural capital + pollution load.)
final goods and services produced annually
in a country, which is estimated according
to the price prevailing in the market.
∴ GNP = C + I + G + (X-M) + (R-P).
(R = receipts from abroad and P = payments
made abroad)
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