Explain with example the value added method in accounding national income
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Value added method, also called net output method, is used to measure the contribution of an economy’s production units to the GDPmp. In other words, value-added method measures value added by each industry in an economy. For calculating national income through value-added method, it is necessary to first calculate gross value added at market price (GVAmp), net value added at market price (NVAmp), and net value added at factor cost (NVAfc).
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