Sage-Tips

What is subtracted from GDP to national income?

The GDP calculation accounts for spending on both exports and imports. Thus, a country’s GDP is the total of consumer spending (C) plus business investment (I) and government spending (G), plus net exports, which is total exports minus total imports (X – M).

Why is the gross domestic product of South Africa always greater than the gross national product?

A country’s real GDP is the economic output after inflation is factored in, while nominal GDP is the output that does not take inflation into account. Nominal GDP is usually higher than real GDP because inflation is a positive number.

Why remittances are not included in national income?

Ans. (i) This is transfer given by the govt., so it will not be included in domestic factor income of India. (ii) As it is the factor income received from external sector, so it will not be included in domestic factor income of India.

Is foreign income included in GDP?

The production of a foreign unit in India is included in India’s GDP.

Why are South Africa’s GNP figures lower than GDP figures?

The GNP (Gross National Product) in South Africa is generally low than the GDP (Gross Domestic Figure) because there are outside businessmen, companies and professionals working in South Africa. This causes more income flowing out from South Africa and thus GNP figures lower than GDP.

Why does South Africa need to increase its economic growth?

For South African economic growth to increase, the competitiveness of the economy needs to improve. South Africa scores relatively well for the efficiency of their product markets and for having a large market size.

Why remittances are useful for developing countries?

They are the private savings of workers and families that are spent in the home country for food, clothing and other expenditures, and which drive the home economy. For many developing nations, remittances from citizens working abroad provide an import source of much-needed funds.

How does remittances help the economy?

Remittances can improve the well-being of family members left behind and boost the economies of receiving countries. They can also create a culture of dependency in the receiving country, lowering labor force participation, promoting conspicuous consumption, and slowing economic growth.

How does gross domestic product GDP differ from gross national income GNI?

GDP is the total market value of all finished goods and services produced within a country in a set time period. GNI is the total income received by the country from its residents and businesses regardless of whether they are located in the country or abroad.

How is national income different from GDP?

National Income is the total value of all services and goods that are produced within a country and the income that comes from abroad for a particular period, normally one year. Gross Domestic Product is defined as the value of the goods and services generated within a country.