GDP (Gross Domestic Product) 

• Measures the total value of final goods and services produced within a country's geographic boundaries, regardless of the nationality of individuals or firms. 
• Example: Cars manufactured in India by a Japanese company will be included in India’s GDP. 

GNP (Gross National Product) 

• Represents the value of output produced by a country's nationals, irrespective of geographic boundaries. 
• Formula: GNP = GDP + Net Factor Income from Abroad. 
• In India, GNP is lower than GDP since the net income from abroad has historically been negative. 

NNP (Net National Product) 

• Obtained by adjusting GNP for depreciation. 
• Formula: NNP = GNP - Depreciation. 
• Since depreciation is always positive, NNP is always less than GNP. 

NDP (Net Domestic Product) 

• Derived by adjusting GDP for depreciation. 
• Formula: NDP = GDP - Depreciation. 
• It reflects the actual productive capacity of a country after accounting for asset wear and tear. 

Factor Cost (FC) 

• Refers to the cost of all factors of production used or consumed in producing goods and services. 
• Formula: Factor Cost (FC) = Market Price - Net Indirect Taxes. 
• Net Indirect Taxes (NIT) = Indirect Taxes - Subsidies. 
• Therefore, Factor Cost = Market Price - Indirect Taxes + Subsidies. 

Market Price (MP) 

• Represents the actual transacted price of goods and services. 
• It includes the impact of taxes and subsidies on the cost of production. 

Transfer Payments 

• Payments made by the government to individuals for which there is no economic activity produced in return. 
• Examples: Old-age pensions, scholarships, unemployment benefits. 

National Income (NI) 

• A measure of the sum of all factor incomes earned by the citizens of a country, whether residing within the country or abroad. 
• Formula: National Income at Factor Cost = NNP at Market Price - Indirect Taxes + Subsidies. 

Personal Income (PI) 

• Includes all income (including transfer payments) received by individuals in a year. 
• Formula: PI = NI + Transfer Payments - Corporate Retained Earnings - Income Taxes - Social Security Taxes. 
• Here, NI refers to National Income. 

Disposable Personal Income (DPI) 

• Represents the amount of income available for individuals to spend or save after paying taxes. 
• Formula: DPI = PI - Personal Taxes. 
• Can also be expressed as: DPI = Consumption + Savings. 

Real GDP 

• Real GDP measures the total value of all goods and services produced in an economy, but it adjusts for inflation by using constant prices from a base year.
  
• This allows Real GDP to reflect the actual quantity of goods and services produced, excluding the effects of price changes over time.
  
• Formula: Real GDP = ∑ (Base Year Prices × Current Quantities).   

Nominal GDP 

• Nominal GDP measures the total value of all goods and services produced in an economy within a specific time period, using current prices.
  
• It does not account for inflation or deflation, so if the price level rises, Nominal GDP will also rise, even if the actual quantity of goods and services remains the same.
  
• Formula: Nominal GDP = ∑ (Current Prices × Current Quantities).