method of measuring national income

Method Of Measuring National Income 

There are four method of measuring national income which method is to be used depend on the availability of data in a country and the purpose in hand all all for method of measuring national income is below on the following way :-

Product Method 

According to this method the total value of final good and services produced in a country during a year is calculated at market price at to find out the GNP the data of all productive activities agriculture products, wood received from forest, minerals received from mines, commodity produced by industry, the contribution of two production made by transport communication insurance companies, lawyer,  doctor, teacher, etc. or collected and assessed at market price only the final good and services are included and the intermediary goods and services are left out.

Income Method

According to this method, the net income payments received by all citizens of a country in a particular year are added up, net income that accure  to all factor of production by way  of net rent, net wages, net interest, and net profit, or all added together but income received in the form of transfer payment are not included in it the data pertaining to income or obtained from different sources from income tax department in respect of high income.   group and in case of worker from their wage bills.

Expenditure Method

According to this method the total expenditure  incurred by the society in a particular year is added together and includes personal consumption expenditure, net domestic investment, Government expenditure on  goods and services and net foreign investment this concept is based on the assumption that national income equals National expenditure.

Value Added Method

Another method of measuring national income is the value added by industries. The difference between the value of material outputs and inputs at each state of production is the value added. If all such difference are added up for industries in the economy, we arrive at the gross domestic product.