OMTEX CLASSES: Output method and income method of measuring national income.

Output method and income method of measuring national income.

Ans.

Output Method
Income Method
1. Under this method national income is estimated by adding the value of all final goods and services produced in a year.
1. Under this method national income is calculated by adding income received by all factors of production during a year.
2. It is widely used by underdeveloped and developed countries.
2. It is widely used by developed countries.
3. It is also known as census of product method.
3. It is also known a factors cost method.
4. It considers output of primary, secondary and tertiary sector and net income from Import and export, receipt and payments.
4. It considers rent + wages + interest + profit + (X - M) + (R + P) and excludes transfer income.