2.1.1 Definition of national income

national income refers to the total monetary value of all goods and services produced within a country’s borders over a specific period, typically a year. It is a crucial economic indicator that provides insights into the overall economic performance and standard of living of a nation.
National income is often used as a measure of a country’s economic health and growth. It encompasses various components such as wages, salaries, rents, profits, and taxes. National income can be calculated through different methods, including the production approach (Gross Domestic Product – GDP), the income approach (Gross National Income – GNI), and the expenditure approach
Gross Domestic Product (GDP) is the most commonly used method to measure national income and represents the total value of all goods and services produced within a country’s borders, regardless of whether the producers are foreign or domestic entities. On the other hand, Gross National Income (GNI) takes into account the income earned by the country’s residents, whether they are located within the country or abroad.