How is the Gross National Income?

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to determine the economic stability of the state uses different concept.All of them help to identify changes and economic growth, as well as suggest further options for development.It becomes a kind of characteristic of the country in the international arena, helping to build relationships with other countries.

So, what is included in the concept of "gross national income"?This is nothing more than the sum of the total primary income citizens who have received a particular country for a certain period of time.Moreover, this calculation applies to both residents within the country and those who are abroad, but is a citizen of.In the latter case it is not considered only the portion of income that went to foreign countries.

Why do you need such a calculation?

State revenues depend not only on the volume of production in the country, from the products and services offered, etc.It is necessary to take into account the total amount earned by residents of the country's resources.And in this case, must take into account the amount of funds received from abroad, as well as the part of the funds, which in turn was transferred to other states.

Gross national income depends on the GDP (gross domestic product).But among them, there are some differences.They are expressed primarily in the fact that the gross domestic product (GDP) reflecting primarily for volume production, its development, and this includes a variety of services that are produced or made by residents (residents) of a particular country.

While gross national income to determine the total amount of income people in the country, and, consequently, of the state as a whole.This is a general cash flow, which receive residents.Gross national income (GNI) is calculated as follows: gross domestic product (GDP) is added the difference between the income received from abroad and paid by other countries.

What is the difference between GDP and GNI?

In this situation it is not always clear what is the difference between these two concepts, and most importantly, it is not clear why they were separated, because they are very similar to each other.

However, the difference is, the gross domestic product - is what determines the goods and services produced within a country, ie,it is expressed in the total value of these goods and services.While gross income shows the total amount of money that have earned the citizens of this country.At the same time they can work not only in their own country.Thus, gross national income includes the income of residents from participation in the GDP of other countries.

In practice, this means that many companies can provide their services abroad.There may be adjusted any production.Profits will be shared between the countries, but some part will go into the country, which owns the company, etc.

way, often referred to as GNI gross national product (GNP).It's the same thing, until 1993 called GNI product and calculated in the same way.Changes have been made in connection with the fact that the GDP reflects only the indicators of production, while the gross national income represents total national income of all sectors of the economy.

for different countries of the world GDP and GNI may be related in different ways.Generally, in the developed countries, the national income is greater than the gross national product, as they may provide funds to developing countries, and then earn interest for providing the resources and are part of the production.

GNI in Russia is lower than the GDP.In addition, if you subtract from GNI use of capital assets and depreciation costs, you can get net national income (NNI), which is also used in the description of the economy.