How To Measure The GNP With Income Approach?


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Muhammad Abdullah786 Profile
The GNP can also be measured with to help of those payments or costs which are faced by the firms regarding production of goods. Accordingly, GNP is the sum of all those payments which the factors of produced earn during a year.

Wages; in connection with the wages, the salaries, wages against physical and mental services, bonuses, the payments in the form of goods and the cash prizes are included. Moreover, whatsoever is deducted by the employers and labor unions against social welfare, etc is also included.

Interest: here we include all that interest which ahs been earned by the people and firms etc. during a year. In addition to domestic interest, the interest earned against foreign securities will also be included. Rather net interest, the gross interest is entered.
Rent; whatsoever is earned by the people against the use of their real assets like farms, houses and shops, etc. during a year will be summed. The rents of self owned houses and shops will also be entered. The royalties earned against copy rights or against the use of natural resources will be included.

Profits: the profits earned by the sole proprietor, joint stock companies; business corporate and partnerships will be included. In addition to profits the undistributed profits and the taxes on profits are also included.

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