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:

1. Discuss different ways of measuring national income.
2. Explain the disadvantage of national income.

Content

Methods of measuring national income of a country

1. 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.
2. Output method: This method measures the total money value of all goods and services produced…