MEANING OF NATIONAL INCOME

    The national income of a country in a year is the value,expressed in monetary terms,of the net contribution of the factors of production through the production units in the country and abroad.It is therefore the monetary expression of the current flow of net final goods and services resulting from the production activities of the normal residents of a country in a year.In short,national income is the total market value of all final goods and services produced in an economy including net factor income from abroad during an accounting year.

    The significance of national income is that it is the value of the goods and services which can be used up in consumption by the residents of the country without causing a reduction in the production capacity of the country.It represents that part of the flow of goods and services generated by the production process which is produced in order to satisfy the wants of the people.