National income is an indicator of the country's well-being

In macroeconomics there is such a thing as national income. This is an economic indicator that characterizes the aggregate of primary incomes of all residents of the country. At the same time, this indicator is calculated as the sum not only by the results of economic activities within the borders of the country, but also outside it (income of residents who left abroad is considered), as well as income paid to other states.

The national income is the sum of the primary monetary receipts of the country that entered the gross national product, and those profits that were received from abroad for the minus of funds given abroad. This indicator can also be studied as the sum of all incomes (wages, payments on shares, bonds, interest on deposits, etc.) of the branches of material production.

For the first time to consider the national income in isolation from productive activity, the founders of Marxism-Leninism became the founders. The pioneer, the "father" of this indicator was U. Petit - an English economist. Further his teaching was developed by the Physiocrats, A. Smith and D. Ricardo. However, none of them had enough strength to fully understand this concept as a national income. This was done only K. Marx. It was he who began to consider not only the incomes of all segments of the population, but also the value of the output. Marx was the first to consider separately such a concept as a consumption fund and such a concept as an accumulation fund. He also gave a full description for each indicator, explaining their functional load. The legendary doctrine of Marx was continued by V. Lenin.

At this stage, there are a huge number of interpretations of the judgments of the great creators, but all of them, in the end, have the same meaning.

National income is the difference between a pure national product and indirect taxes. Also here it is possible to include subsidies and grants given out by the state to business. Similarly, if we consider this indicator as a net product of the whole society or newly created value. Net national product (PPP) is an indicator that represents the difference between the country's gross national income and depreciation charges.

Various methods can be used to calculate national income. The USSR used the production method. It summarizes the gross output of each industry, each production, relating to different types of property. After that, the next step is to calculate all the material costs expended for production. When subtracting the sum of material costs from the gross output, the desired value is obtained - the national income. The formula looks like this:

VP - M3 = ND, where

VP - gross production; M3 - material costs; ND - national income.

After analyzing each industry and adding the resulting indicators, you can find the national income of the country.

Gross production, created in a year, consists of two parts - a newly created and previously created product. For example, in a factory that produces furniture, take into account the accessories, various components that were used in the manufacture of furniture. But these details have already been taken into account at the factory. Therefore, when calculating gross output, a double bill is possible, which can not be said of national income (because all costs are excluded).