Question

explian the steps to calculate the national income by expenditure method​

Answer 1

Answer:

The steps involved in calculating National Income

by Expenditure Method are:

Step 1: Identify the Economic Units incurring Final

Expenditure: ...

Step 2: Classification of Final Expenditure: ...

Step 3: Calculate Domestic Income (NDPFC) ...

Step 4: Estimate net factor income from abroad

(NFIA) to arrive at National Income:

hope it's correct..........

Answer 2

There are mainly 4 steps.

Explanation:

(i) Identification of economic units incurring final expenditure, e.g., household (or consuming) sector, firm (or producing) sector and government sector.

(ii) Classification of final aggregate expenditure into following components:

1. Private final consumption expenditure.

2. Government final consumption expenditure.

3. Gross fixed capital formation.

4. Change in stocks.

5. Net exports.

(iii) Measurement final expenditure on the above components. Sum total of the above five items gives us the value of GDP at ME By deducting depreciation and net indirect taxes from GDP at MP we get NDP at FC.

(iv) Estimation of net factor income from abroad which is added to NDP at FC (Domestic Income) to obtain NNP at FC (National Income).