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Cheat sheet · Class 12 · CBSE · Commerce Economics

Macroeconomics: National Income Accounting cheat sheet

The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.

CBSE Class 12 · Economics

Cheat sheet

Chapter 2National Income Accounting

GDP_MP − depreciation + NFIA − net indirect taxes = NNP_FC (National Income).

1. Aggregates

GNP=GDP+NFIAGNP = GDP + NFIANDP=GDP−DepreciationNDP = GDP - \text{Depreciation}
NNPFC=GDPMP−Dep+NFIA−(Indirect taxes−Subsidies)NNP_{FC} = GDP_{MP} - \text{Dep} + NFIA - (\text{Indirect taxes} - \text{Subsidies})

NFIA = factor income from abroad − factor income paid abroad.

2. Three Methods

MethodMeasures
Value added (product)sum of GVA by sectors
ExpenditureC + I + G + (X − M)
Incomewages + rent + interest + profit + mixed income

3. Real vs Nominal

GDP deflator=Nominal GDPReal GDP×100\text{GDP deflator} = \dfrac{\text{Nominal GDP}}{\text{Real GDP}}\times100
  • GDP isn't a perfect welfare index: distribution, non-monetary exchanges, externalities.

4. Key Points

  • Avoid double counting: count only final goods or value added.
  • Intermediate goods are excluded.
  • Circular flow of income.
  • Stocks vs flows.

Remember: GDP → NNP_FC | 3 methods | deflator | welfare limits

Macroeconomics: National Income Accounting: questions and notes

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