Question

Expenditure method of national income steps

Answer 1

Expenditure Method for Measurement of National Income!Factor income earned by factors of production is spent in the form of expenditure on purchase of goods and services produced by firms.ADVERTISEMENTS:1. This method measures national income as sum total of final expenditures incurred by households, business firms, government and foreigners.2. This total final expenditure isequal to gross domestic productat market price, i.e. ∑Final Expenditure = GDPMP.3. This method is also known as ‘Income Disposal Metho