Question

Explain the methods of calculating National Income

Answer 1

Method of calculating National income

The National Income of a country can be calculated by the following three

Methods.

1. Product Method

2. Income Method

3. Expenditure Method

(1) Product Method- In this method, the total value of all goods and services produced in a country is taken into account.

(2) Income method - In this method, the Income and Payments received by all the people in the country are calculated

(3) Expenditure Method- In this method, we add up the expenditure of all people on consumer goods, investment, and saving.