How to calculate national income?
There are several ways to calculate national income. National income is defined as the total value of goods and services produced in a country in one year. National income can be calculated by using the income method, the expenditure method, or the output method. With the income method, we add all of the income received by people in a country in a year. This includes money earned from rents, interest, wages, and profits. With the expenditure method, we add up all the spending on "new and final goods and services" made by individuals and business in the economy in one year. In the output method, we add the total value of "new and final output" produced throughout the economy in one year. In short, there are several ways to calculate national income.