Macroeconomics (2066Q2): What is national income? How it is measured? Explain the reasons for its underestimation in developing countries like Nepal.

National Income

National income is defined as the total value of all the goods and services produced within a country plus income coming from abroad in a particular time period usually 1 year.

Measurement of National Income

National income is measured through 3 methods:-

1.     Income Approach
2.    Expenditure Approach
3.    Production Approach

The reasons for its underestimation in developing countries like Nepal

1.     Political instability

2.     Govt. is enjoying Remittance, so hasn't serious about the National Income

3.     Export/Import businessmen are just interested in import goods than export the national products.

4.     National products needs a lot of efforts by the Govt., businessman and producers in order to make it competitive in international market. So, it needs high investment which is difficult to have in Nepal