Explain the main steps involved in measuring national income through p

1.	Explain the main steps involved in measuring national income through product method
Answer» 1. Classify the producing units into industrial sectors like primary, secondary and tertiary sectors. 2. Estimate the net value added at the factor cost. 3. Estimate value of output by sales + change in stock 4. Estimate gross value added by value of output – intermediate consumption 5. Deduct depreciation and net indirect tax from gross value added at market price to arrive at net value added at factor cost = NDP_Fc 6. Add net factor income received from abroad to NDP_Fc to obtain NNP_Fc which is national income

Explain the main steps involved in measuring national income through product method

Answer»

1. Classify the producing units into industrial sectors like primary, secondary and tertiary sectors.

2. Estimate the net value added at the factor cost.

3. Estimate value of output by sales + change in stock

4. Estimate gross value added by value of output – intermediate consumption

5. Deduct depreciation and net indirect tax from gross value added at market price to arrive at net value added at factor cost = NDP_Fc

6. Add net factor income received from abroad to NDP_Fc to obtain NNP_Fc which is national income