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National Income

National Income is the money value of all the final goods and services produced by an economy in a specific period of time. Since in an economy, different types of goods and services are produced, it is not possible to physically add them. For example, food grains are measured in kilograms, milk is measured in liters, cloth is measured in metres. Moreover, besides the goods, in an economy different types of services are also rendered such as those of doctors, law years, engineers, singers, etc. Hence, national income cannot be stated as so many million kilograms of food grains, so many million liters of milk, etc. Therefore all these goods and services are measured in terms of money. The value of different goods and services produced during a year is found out (without duplication) in terms of money and added together to find the value of national income or national output.

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