INCOME METHOD PRODUCTION METHOD

36.         INCOME METHOD
PRODUCTION METHOD
1.      Meaning
The national income is calculated on the basis of income distributed to the factors of production.


2.      Formula
National Income = Rent + Wages + Interest + Profit


The national income is calculated on the basis of the gross value of final production of goods and services manufactured in various sectors. i.e. primary, secondary and tertiary, during a given period of time.

National Income = Value of Goods and Services of primary sector +Secondary Sector + Tertiary Sector.