The difference between these two incomes is Net Factor Income from abroad (NFIA), which is included in National Income (NY) and excluded from Domestic Income (DY). Where NFIA is the difference between income earned by normal residents from rest of the world and similar payments made to Non residents within the domestic territory. The primary difference between the gross national product and national income lies in the fact that how these measurements are taken, and how the economic growth is determined based on these measurements. National Income measures the total economic growth of a country and also considers the income and taxes that are earned at a domestic level. Handling Data: Difference between Nominal and Real National Income (GDP) Level: AS, A Level. Board: AQA, Edexcel, OCR, IB. It is important to distinguish between the nominal and real value of a country's national output and income. Test Your Knowledge - MCQ Money GDP and Real GDP. MCQ revision money GDP and real GDP - revision video. GNP at factor cost= GNP at market price + Net indirect taxes. National Income = Domestic income + Net factor income from abroad. GDP at factor cost = NDP at factor cost – Depreciation. Basis of the difference between the concept of market price and factor cost is: a.

While income is generated, wealth is created, there is a big difference between two. Many think that these two terms are one and the same thing, but in reality, income is a stream of money, which a person receives from different sources such as salary, rent, profit, interest etc., that helps in the creation of wealth and wealth is the total market value of all the assets possessed, stored or saved by a person for future use.

The former is the money earned by a person, over a limited period say one week or one month, whereas the latter is the money earned by a person during his lifetime. So, if you are also confused between these two terms, take a look at the article provided below to have a clear understanding of these two terms.

Content: Income Vs Wealth

Comparison Chart

Basis for Comparison	Income	Wealth
Meaning	Income refers to the money received or earned on a continuous basis, as a return for work or investments.	Wealth implies money or valuable possession accumulated by a person during the course of his life.
What is it?	Flow of money	Stock of assets
Acquisition	Income is generated immediately.	Wealth is created over time.
Tax levied	Income tax	Wealth tax

Definition of Income

We define income as the monetary return that accrue/arise or is expected to accrue/arise at fixed intervals from certain sources. It is an amount of money, which a person gets, receives or earns, either through investing capital or through providing goods or services. It is the fundamental requirement of an individual, household or business to finance routine expenses. The sources of income can be:

Wages and salary from employment.
Rental income from house property.
Interest on savings and securities.
Dividend income.
Income from business or profession.

In accounting terminology, income is net of revenue, i.e. revenue less all expenses and taxes. Moreover, while the calculation of taxes, income covers only revenue receipts and includes those incomes also which do not arise on a regular basis, such as winning from lotteries, horse races or crossword puzzles.

Definition of Wealth

Wealth denotes the current market value of total assets owned by an individual, society, company and country. It is the sum of all tangible and intangible assets, an entity possesses, that can be exchanged for money including savings, investments, real estate, cash and other valuable items less all liabilities.

GDP (Gross Domestic Product) is the most common measure to find out the wealth of the country while the wealth of individual can be determined through their Net Worth.

In economics, the term ‘wealth’ refers to the aggregate of all assets of a firm, household, government, etc. , that generates income or is capable of generating income in future. It takes into account human capital and natural resources, rather than money and securities. Economic wealth can be divided into two categories, i.e. monetary wealth and non-monetary wealth.

Key Differences Between Income and Wealth

The differences between income and wealth can be drawn clearly on the following grounds:

The amount of money received on a periodic basis, in exchange for the products or services provided or the capital invested is called income. Wealth can be defined as the assets or property which are held by a person during his course of life.
Income is the flow of money, obtained from factors of production. On the other hand, wealth is the market price of the stock of asset possessed by an individual or household.
Income is earned or received, during a limited period. Conversely, wealth is accumulated over time, i.e. the creation of wealth takes time.
Income tax is charged on the income of an individual from various sources i.e. salary, house property, capital gains, business/profession and other sources. As against this, wealth tax is levied on an individual or household’s wealth.

Conclusion

Therefore, income is something that a person gets in return for the work performed or money invested by him. On the other hand, the wealth of a person is something that helps him/her to survive for some days without working. Income is the only source that can help in the creation of wealth, so it can be said that income yields wealth.

Related Differences

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3.1 Demand for Money
The notion of a demand for money may strike you at first glance as bizarre. Don't you just want as much as you can get? Or isn't money what you use when you demand other goods? Here is where we have to remember that money is a stock not a flow, and that income and wealth are not money. Demand for money is a question of how much of your wealth you wish to hold in the form of money at any point in time. (Supply of money is also a stock concept.)

Your demand for money is how much of your wealth you wish to hold as money at any moment in time. It is thus a stock demand. Your wealth is a stock, and you must decide how to allocate that stock of wealth between different kinds of assets -- for example a house, income-earning securities, a checking account, and cash.

Why would you hold any of your wealth as money -- as cash or checking deposits? Those assets earn little or no interest. Wouldn't it be more sensible to hold all your wealth in the form of assets that yield income? Note that:

2. There is no intrinsic value in the money balances you hold except in their use as a medium of exchange. Generally, you acquire money in order to get rid of it -- to buy things. While you hold it, money does not keep you warm, entertain you, or provide any other benefit.

Economists identify two reasons why people will demand money balances, or desire to hold a certain stock of money even if there is no intrinsic value for the money balances they hold.

Difference Between Real National Income And Money National Income

3.2 Transactions Motive for Holding Money
The most obvious answer is that we hold some money because it's convenient to buy stuff with. We'll call this first reason the transactions motive. Essentially, it's convenient to hold a certain average amount of money at any given time, depending on the kind of purchases you make and the size of your income.

One of the most important functions of money is that it is the universally accepted medium of exchange -- this is the main reason you hold money. Thus, one reason to hold money is to use it as a means of payment in transactions in the future. Now, if there was a perfect match between the moments you receive money in transactions and the moments you use money, you would not need to hold any money at all. If I were paid every Friday, and I could pay all my bills on the same day, then I would need to hold very little money.

Unfortunately, in the real world, there is not going to be an exact match between when I receive money and when I need to make payments. Let us say that as a work study student, you receive $500 every month as payment for your work. This payment comes once a month. But

Distinguish Between Real National Income And Money National Income