Economy Simplified: GDP, GNP, National Income, Personal Income and Personal Disposable Income explained through a diagram.

1. Gross Domestic Product measures the aggregate production of final goods and services taking place within the domestic economy during a year.

2. GNP ≡ GDP + Net factor income from abroad.

(Net factor income from abroad = Factor income earned by the domestic factors of production employed in the rest of the world – Factor income earned by the factors of production of the rest of the world employed in the domestic economy)

3. National Income (NI ) i.e. NNP at factor cost =NNP at market prices –(Indirect taxes – Subsidies).

Diagrammatic Representation