Elements of national accounting – Method of measuring national income
Economics SSS 2 Third Term
WEEK 6
Elements of national accounting – Method of measuring national income
Performance Objectives
Student should be able to:
- Discuss different ways of measuring national income.
- Explain the disadvantage of national income.
Content
Methods of measuring national income of a country
- Income method: This is obtained by adding incomes received by all the factors of production. The incomes to be added include workers earnings, profit from entrepreneurs, rents on land, interest from capital etc. However, to avoid double-counting, transfer of payments such as payment to old people, beggars etc are not included. They are part of the income counted already.
- Output method: This method measures the total money value of all goods and services produced in the country in a year. To avoid double-counting,.... View More
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