National Income can be calculated by 3 methods. By which method, we get the maximum value of National Income?
National Income can be calculated by 3 methods. By which method, we get the maximum value of National Income?
(a) Expenditure Method
(b) Income Method
(c) Value Added Method
(d) All 3 methods give same value of national income
Anurag Pathak Changed status to publish December 13, 2023
Ans – (d)
Explanation:-
National Income can be calculated by 3 methods:
- Value-added Method
- Income Method
- Expenditure Method
The value of National Income is the same for all three methods. because these are the three phases of the circular flow of income.
As it is assumed savings are zero
When the savings of producers is zero
the cost of production = Income of factor of production
When the savings of factors of production is zero
Income of factor of production = Expenditure of factors of production on goods and services
Thus
Cost of production = Income of factor of production = Expenditure of factors of production
Value Added Method = Income Method = Expenditure Method
Anurag Pathak Changed status to publish December 13, 2023
