project on national income
Answers
Answer:
National income is a measure of the value of the output of the good and services produced by an economy over a period of time. It is defined as a flow of output.
Economic essay
National income is a measure of the value of the output of the good and services produced by an economy over a period of time. It is defined as a flow of output. A reason why we need to collect national income figures is to provide an accurate estimate of changes in the volume of output produced during one year, which can then be compared with other years. In order to see what has happened to the real national income when two years are compared, we must remove the effects of inflation on the prices of data, so that we don't obtain…show more content…
It is far easier to measure investment gross than net. GDP, GNP and NNP are measured using the income, output and expenditure method. The output measure of GDP is obtained by combining value added (value of production less cost of inputs) by all businesses: agriculture, mining, manufacturing and services. Output data are usually presented in index form (that is, with a base year such as 1990 equal to 100). Therefore here you are measuring the value of output produced by industries. However you must be careful not to count the same product twice. For instance the value of cars sold by manufacturers is added to the value of output of the tyres in the tyre firm. This is double counting; the value added should be the difference between the sales revenue received and the costs of raw materials used. The income measure is the value of output that is based on the costs involved in producing that output. These costs include wages, rent, interest rate and profit. All these methods of payments represent income paid to factors of production, for instance workers receive wages and entrepreneurs receive profits
Thanks they thiyo bhai