Methods to calculate National Income

Methods to calculate National Income

Product method.Income methodExpenditure methodMethods

Product methodNational income is calculated by adding up the money value of goods and services produced by the primary, secondary and tertiary sectors.It is useful in assessing the contribution of each of these sectors towards national income.It is used to analyse which sector contributes the most to national income.

Income methodNational income is calculated based on rent, wage, interest and profit, which are the rewards for factors of production.Income is the reward for factors of production.It is helpful in analysing the contribution of each factor of production to the national income.

Expenditure methodEstimate the national income by calculating the expenditure incurred by individuals, firms and government in a particular year.National income is the summation of consumption expenditure, investment expenditure and government expenditure.

HASEENA A PROLL NO: 42SOCIAL SCIENCEKSTC

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