Question

Explain the Output method of measuring National income.

Answer 1

3 Important Methods for Measuring National Income

Product Method: In this method, national income is measured as a flow of goods and services. ...

Income Method: Under this method, national income is measured as a flow of factor incomes. ...

Expenditure Method: In this method, national income is measured as a flow of expenditure.

Answer 2

Answer:

The output method also known as the value method calculates the value added by each organization in the manufacturing goods and services.

• Value added by an enterprise is obtained by deducting from the value of output produced by an enterprise expenditure on intermediate goods such as raw materials, unfinished goods (bought from other firms).
• One needs to calculate the net value added at factor expense (NVAfc) in order to calculate the national income using this method.