Question

Define National Income. What is the main method of its calculation?

Answer 1

The total amount of income earned in a country during the year is called National Income. That is, the goods produced in a country in a year and the total value of services is called National Income.

Consumption expenditure+appropriation best way to measure economic progress is National Income.

Calculation of National Income : when the income of the individuals of the nation is calculated through production, then it is the method of production calculation.

Under the "Income calculation method" the National income is calculated on the basis of the income of the individuals of the nation. When the National Income is calculated on the basis of different prices of goods produced by the efforts of individuals under different circumstances, then in such a situation it is called value addition method.

Under occupational calculation method, the national income is calculated on the basis of occupational composition. Production calculation method and income calculation method are considered best among the above methods in economics.