Explain the methods of computing National Income.
Answers
Answer:
National Income
Expenditure and Income Method
National income or the gross national income is the total income earned by all residents and enterprises of a country over a specific period. You can also define national income as the total value of all goods and services produced over a specific period of time. Now, there are several methods of calculating national income.
The three most common methods are the value-added method, the income method, and the expenditure method. The value-added method focuses on the value added to a product at each stage of its production.
Next, the income method focuses on the income received on the factors of production such as land and labor. And finally, the expenditure method focuses on the various types of expenditure based on consumption and investment.