Nominal National Income – If the value of a commodity produced in a country is calculated at a current rate, it is called a national income or nominal national income. And this is called current national income. To calculate this, we have to multiply the price of the current year by the number of goods and services produced in the current year. This is called the national income of the country at current prices as the cost of production is calculated based on the prevailing prices in the country during the current year.
It is considered a weak measure in measuring the economic growth of a country’s financial system. This is because it informs the real estate and real development of the financial system. If production does not increase and prices rise, it is reported that nominal national income increases.
This increase in national income has not improved the standard of living of the countrymen in any way. That is why the increase in national income at current prices is called an indicator of the country’s economic growth.