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Overview of National Income

Definition of National Income: Traditional Approach: According to Marshall , “National income is the labor and capital of a country, acting on its natural resources; produce annually a certain net aggregate of commodities, material and immaterial including services of all kinds.” According to Fisher, “The national income consists solely of services as received by ultimate consumers, whether from their material or from their human environments.” According to Pigou, “National income is that part of the objective income of the community, including income from abroad which can be measured in money.” Modern Approach: According to Siman Kuznets, “National income is the net output of commodities and services flowing during the year from the country’s productive system in the hands of ultimate customers.” According to Lipsey, “National income refers to the total market value of all goods and services produced in the economy during some specified period of time