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Real national income refers to national income at constant prices. It is also called Real GDP.
Real National Income or Real GDP = {tex}Q \times P^*{/tex}
where Q = Qty of final goods and service produced during an accounting year
and {tex}P^* {/tex} = Prices prevailing during the base year
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Final consumption expenditure consists of expenditure incurred by resident institutional units (Households, NPISHs, sector of general government) on goods or services that are used for the direct satisfaction of individual needs or wants or the collective needs of members of the community.
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