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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.

By definitions, National income= Income from within the country and from abroad. GDP=Income within the country.

Here my doubt is I have seen in some textbooks why national income is referred as GDP and vice versa in measuring methods of national income?

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  • $\begingroup$ In a closed economy, where the values of imports and exports are both zero, GDP = National Income. The textbooks equating the two probably assume closed economy to simplify discussions. $\endgroup$ – Herr K. Jan 15 at 2:01
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So, if there is no abroad (i.e. the economy is a closed one or what is called an autarky), then GNI = GDP.

Source: UN System of National Accounts (2008, p. 333).

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The degree of precision with which the various terms for these economic aggregates are used may vary with the context.

But if one is trying to be strictly correct, three distinctions should be borne in mind:

  1. Gross v Net: net meaning net of a deduction for depreciation of capital.
  2. Domestic v National: national being inclusive of net property income from abroad (ie income earned by nationals from assets located abroad, less income earned by foreigners from domestically located assets) and also, as Kenny LJ points out, similar net international flows relating to employment income and taxes and subsidies.
  3. At factor cost v At market prices: the latter being inclusive of indirect taxes.

In terms of these distinctions: GDP is clearly gross and domestic. National income, without further clarification, could be either gross or net, but it is clearly not domestic. So GDP and national income are conceptually distinct, although they could be numerically the same if national income is measured gross and the property income and other flows as above from and to abroad happen to net to zero.

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GNI is simply a new name for GNP. It is GDP plus net primary income from abroad (i.e. with primary income paid abroad treated as negative). Primary income is described in Chapter 11 of the IMF BOP manual

GNDI is GNI plus net secondary income from abroad (and similarly secondary income paid abroad is treated as negative). Net secondary income from abroad is the same thing as is meant by net current transfers from abroad: see Chapter 12 of the IMF BOP manual

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