Question

Methods and difficulties in measuring national income conclusion

Answer 1

3 Alternative Methods Used for Measuring National Income

Value Added Method: This is also called output method or production method. ...

Income Method: This method approaches national income from distribution side. ...

Expenditure Method: Expenditure method arrives at national income by adding up all expenditures made on goods and services during a year

Answer 2

Explanation:

Prima facie, national income can be measured by adding the values of the final products'. A preferable alternative is to total the values added at each stage of production. Double counting is a common problem faced by all countries. Transfer payments should not be included in the calculations of GNP.