How National Income is Determined

How to distinguish national income problems 1/2 - Please explain how to distinguish national income. Equilibrium, use of income and expenditure, and explanation of leaks and infusions. The wages that people receive and their expenditure determines national income. The above cycle shows that wages are consumed at home, but still they can be refunded to the company. Leakage in a cyclical flow is money that the family pays for companies and services by paying wages.

In order to classify the pattern of wealth and income of the country, the basis of classification must be decided. Classification systems classify wealth and income based on ownership of production factors (labor, land, capital, and sometimes entrepreneurial spirit) and each income form is classified as wage, rent, interest, and profit. Usually, individual distribution statistics based on tax return classify wealth and income for each asset per capita. Per capita gross national income (GNI) provides an estimate of per capita annual income of various countries. Countries with fairly large modern industry sectors have higher GNI per capita than low-developed countries. For example, at the beginning of the 21st century, the World Bank presumed that the per capita gross national income of the most developed countries is more than about $ 10,000, but the per capita gross national income of the most developed countries is less than $ 825 did. The income varies greatly depending on the country

In the remaining analyzes, we classify the countries at the development level measured by the gross national income (GNI) per capita. Therefore, the country is divided into high income, middle income and high income, middle low income and low income (Table E). To maintain compatibility with similar classifications used elsewhere, the per capita GNI threshold is determined by the World Bank. Countries with per capita GNI less than $ 1,355 are classified as low-income countries, middle-low-income countries from $ 1,036 to $ 4,085, middle- and high-income countries from $ 4,086 to $ 12,615, and incomes over $ 12,615. The dollar-based per capita GNI is estimated using the World Bank Atlas method and the classification in Table E is based on 2012 data.

Data are obtained from the World Bank's online database and grouped according to their income classification. The World Bank classifies the country by the gross national income per capita. The income groups in this report include low income (gross national income per capita 1,025 dollars or less), middle low income group (gross national income per capita 1,026 dollars to $ 4,035 dollars), middle and high income groups (gross national income per capita $ 4,036 )It is included. The dollar range is $ 12,475). To represent low-income countries, low-income groups and low-income groups are grouped into one category. This category contains 43 countries (the names of these countries are listed in the appendix). In this report, middle and high income strata are used to represent high-income countries. There are 34 countries in this category. Data for all these countries was implemented in 2010.