Although GNP measures material well-being of an economy, it remains a less effective measure as far as national welfare is concerned. National welfare is a much broader concept, which includes not only material well-being but also other aspects of welfare such as education, health, environment, habits, emotions, etc. However, these aspects cannot be measured in monetary terms. Thus, GNP is not a
successful measure of national welfare.
Real increase in GNP can be attained by sustainable development without degrading environmental and human resources. Thus, the concept of 'Green GNP' can be used as measure of national welfare.

(i) Taking care of aged parents will not be included in National Income as it does not involve the production of goods and services. It is a non-economic activity reflecting love and care for parents and it is difficult to estimate the market value of such activities.
(ii) Corporate tax is included in the National Income as a part of corporate profit, not separately.
(iii) Expenditure on providing police services by the government is included in National Income as it forms a part of government final consumption expenditure. 

(i) Rent received by a resident Indian from his property in Singapore will not be included in domestic product of India as this income is earned outside the domestic (economic) territory of India.
(ii)Salaries to Indians working in Japanese Embassy in India will not be a part of domestic product of India as embassy of Japan in India is not a part of domestic territory of India. Hence, this income is not earned within the domestic territory of India.
(iii) Profits earned by a branch of an American Bank in India will be included in domestic product of India as the branch of American bank is located within the domestic territory of India. Thus, it is the income earned within the domestic territory of India.
(iv)Salaries paid to Koreans working in Indian Embassy in Korea will be a part of domestic product of India because this income is earned within the domestic territory of India. Indian embassy in Korea is treated as located within the domestic territory of India.

(i) Old age pension given by the government will not be a part of domestic factor income of India be-cause it is transfer payment.
(ii) Factor income from abroad will not be a part of domestic factor income of India because it is a part of national factor income of India. Domestic factor income becomes national factor income by adding factor income from abroad to domestic income.
(iii) Salaries received by the Indian residents working in the Russian Embassy in India will be a part of the domestic factor income of India because these are the wages to Indian residents within the national territory of India.
(iv) Profits earned by a company in India, which is owned by a non-resident is not a part of domestic factor income of India because it is a retained earnings of resident company abroad. It is the part of factor income to abroad.

Following are the three methods and their respective identities for calculating GDP:
(i) Value Added Method:
\({ GDP }_{ MP }={ GVA }_{ 1 }+{ GVA }_{ 2 }+.......+{ GVA }_{ N }\)
\({ GDP }_{ MP }=\sum _{ i=l }^{ N }{ { GVA }_{ i } } \)
(ii) Income Method:
\({ GDP }_{ MP }=\quad Rent+Wage+Interest+Profit+Depreciation+Net\quad Indirect\quad Taxes\)
\({ GDP }_{ MP }=R+W+{ I }_{ n }+P+Depreciation+NIT\)
(iii) Expenditure Method:
\({ GDP }_{ MP }=Private\quad Consumption+Investment+Government\quad Consumption+\left( Exports-Imports \right) \)
\({ GDP }_{ MP }=C+I+G+\left( X-M \right) \)
All the three methods of measuring National Income give the same value of GDP. Each method reflects three different phases of the same circular flow of income.
(i) Production phase gives the GDP using output or value added method.
(ii) Distribution phase give the GDP using income method.
(iii) Disposition phase gives the GDP using expenditure method.

The two basic components of personal disposable income are:
(i) Household consumption
(ii) Household saving

Flow is an economic variable that is measured over a specific period of time. Investment, monetary expenditure, a family's consumption of salt, services of a tutor and production. Cement are flow concepts. Stock is an economic variable that is measured at a specific point of time. A hundred rupee note and machinery of a sugar mill are stock concepts.

We know that:
Real GDP\(=\frac { Nominal\quad GDP }{ Price\quad Index } \times 100\)
Substituting the appropriate values in (i); we get;
\(200=\frac { Nominal\quad GDP }{ 110 } \times 100\)
Nominal GDP\(\frac { 200\times 110 }{ 100 } \)
\(\\ =220\)
Thus, the Nominal GDP is Rs.220

(i) Furniture purchased by a school is a final product because it is used by the students and staff for final consumption. It is kind of investment by the school as the school will use the furniture for several years.
(ii) Chalks, dusters, etc. purchased by a school are final products as they are used by the final users, that is, teachers.

Final goods are those goods which are ready for consumption or capital formation by final users. Intermediate goods, on the other hand, are those goods which not meant for final consumption. These are raw materials used in the production of other goods and services. For example: A chair is a final good, but wood, cane, foam, cloth, etc. used to produce chair are all intermediary goods.

Following precautions should be taken while measuring the national income using expenditure method:

(i) While calculating the total expenditure, only final expenditure must be included and not the intermediate expenditure. If both these are included, the problem of double counting arises.

(ii) Expenditure on second hand goods should not be included in final expenditure since the production of old goods took place in previous years and not in the current year.

(iii) The expenditure on old or new shares should not be included in final expenditure because it is only a transfer of wealth, which has not affected production at all.

(iv) Only gross investment should be included in total expenditure. Gross investment also includes expenditure on depreciation.

(v) Factor income (property income, labour income, interest, rent, wages) received by domestic territory to foreign residents should be included in imports.