Which of the following method uses adding up of factor payments received during a year to calculate national income?

Product Method

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Income Method

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Expenditure Method

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Value added Method

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Solution

The correct option is B Income Method
Income method uses adding up of factor payments received during a year to calculate national income.

Income method: according to this method income is measured as flow of factors income. There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.

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