National income is the total value of goods and services produced by a country during a financial year. It is basically the net result of all economic activities of any country during a period of one year and is valued in terms of money. It includes payments made to all resources either in the form of wages, interest, rent, and profits. The progress of a country can be determined by the growth of the national income of the country.
There are three ways of measuring the National Income of a country. They are from the income side, the output side and the expenditure side. 
Methods of Measuring National Income are

  1. Product Method
  2. Income Method
  3. Expenditure Method
  4. Product Method

Under this method, we add the values of output produced or services rendered by the different sectors of the economy during the year in order to calculate the National Income.
In this method, we include only the value added by each firm in the production process in the output figure.

  1. Income Method

Under this method, we add all the incomes from employment and ownership of assets before taxation received from all the production activities in an economy. Thus, it is also the Factor Income method

  1. Expenditure Method

This method measures the total domestic expenditure of the economy. It consists of two elements, viz. Consumption expenditure and Investment expenditure.
Consumption expenditure includes consumption expenditure of the household sector on goods and services and consumption outlays of the business sector and public authorities.
Investment expenditure refers to the expenditure on the making of fixed capital such as Plant and Machinery, buildings, etc.

Ashi Sachdeva BBA 3rd TIAS New Delhi


Rashmi Gujrati

Prof. Dr. Rashmi Gujrati , Professor-Dean (International Affairs) CT University, India President-Editor-In-Chief Tradepreneur Global Academic Platform, UK (Institution of Research & Development) Qualification: M.com, MBA, Ph.D. Specialization: Marketing, Finance & International Business, Entrepreneurship. Editor-In-Chief International Journal of Business Operation Editorial Board member of (IJEFMS) Science Publish Group, USA Editorial Board Member of Academic for Global Business Advancement Association, USA Reviewer of Common Ground Research Networks University of Illinois, USA Reviewer IBIMA Association, Spain Scientific Review Committee, Advisory Board Member of AASE Member Chung Yuan Christiana University, Taiwan Scientific Board Member of InTraders Academic Platform, Turkey Editorial Board Member of Journal of Agriculture, Food, Environment and Animal Sciences, Turkey Indian Commerce Association Indian Accounting Association Indian College Principals Association Review & Editorial Committee Board Member Laescuela Education Scientific Committee Member of Research Synergy Foundation (RSF) Indonesia Editorial & Review Committee member FSSER Malaysia Editorial & Review Committee member GI-SSF Malaysia +919759347347

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