Output Method of Measuring National Income

National income of a country or GDP of a country is difficult to measure because it is not about income of a single person or community rather it involves aggregating the income of all the people of a country. One of the methods of calculating national incomes is the output method, which in simple words refers to finding out the total value of goods and services produced by a country during a year.

According to output method of measuring national income, national income of a country can be calculated by adding the value of all the final goods and services produced by a country during a particular year. The figures for this sort of calculation can be easily obtained from the tax records submitted by the various companies. It will include all the companies whether it’s manufacturing company or service related companies like banks and financial institutions.

The total of these values will give GDP at factor cost and in that figure if one adds net income from abroad (Income received from abroad – Payments to abroad) one will get gross national income at factor cost. After deducting deprecation from gross national income one will get the figure of national income of a country during a particular year.

1 comment… add one

Leave a Comment


Related pages


cheque vs draftadvantages and disadvantages of process costingdisadvantages of job specializationwhat is systematic and unsystematic riskconsignor meansover absorption of overheadsdisadvantages of price skimmingscope of micro and macro economicsconsignee consignoraccounting unearned revenuemarketing skimming definitionbundling pricing strategy examplesfactors that influence elasticity of demandexamples of mixed economic systemnarendra modi wiki in hindi languagesalaries payable journal entryadvantages of debit cardthe autocratic leaderelectronic clearing servicegold bullion standard definitionwhat does consignee meanimportance of capital budgeting techniquesexamples of cash inflowsdifference between equity shares and debenturesadvantages disadvantages globalizationidentify the advantages and disadvantages of a command economyexamples of diminishing marginal utilitymarket economy characteristics advantages disadvantagesunitary elastic exampledisadvantages of advertisementdifference between overdraft and term loansystematic and unsystematic riskwho is autocratic leaderadvantages of television advertisementdistinguish between cash discount and trade discountpurchased goods on credit journal entriesunearned income in balance sheetdifference between carriage and freightconglomerate acquisitionwholesale funding vs retail fundingcapital account convertibility indiameaning of inferior goodswhat is a vertical mergerjournal entry deferred revenuecharacteristics of socialist economic systemdefinition of nondurable goodswhat is factoring in bankingdisadvantages of direct investmentconvention of full disclosure in accountingunearned sales revenue balance sheetskimming and penetrationwhat is crossing chequefull form of rtgs in bankingtechniques of marginal costingcosting and pricing methodsdifference between tariff and taxdefine ficitiousdifferent types of chequeswhat is the law of diminishing returns in economicsdirect and indirect quotation examplesjain irrigation dvr stock pricedefine privatisationexamples of primary industriesaccounting for unearned revenuecashflow advantagequota and tarifffictitious assets wikipediaconsumer durable goods examplespricing skimmingcapitalism and socialism differencespayback period advantagessingle seller monopoly