PowerPoint Presentation

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Introduction to national income. [image] Calculator pen compass money and a paper with graphs printed on it.

DEFINITION OF NATIONAL INCOME. National income is the total value of all final goods and services produced within a country's borders in a given period of time. In other words, it is the total income generated by the factors of production in an economy, such as labor, capital, and land. National income is an important economic indicator because it can be used to track the growth of an economy, measure the standard of living, and assess the distribution of income..

[image] Old wrinkled hands with some coins. Importance of measuring national income.

Methods of measuring national income. There are three main methods of measuring national income: Value added method Income method Expenditure method.

Graph on document with pen. Value added method. The value added method measures the value of output produced by each industry in the economy, minus the value of intermediate goods and services used up in the production process. The sum of the value added by all industries is equal to the national income. This method is the most accurate method, but it is also the most complex. It requires detailed data on the output and input of each industry..

Income method. The income method measures the total income generated in the economy by all factors of production, such as wages, salaries, interest, rent, and profits. The sum of all factor incomes is equal to the national income. This method is the simplest method, but it can be difficult to measure all factor incomes. For example, it can be difficult to measure the income of self-employed workers..

Office building overlayed with stock market graphs.

Many question marks on black background. **Thank you**.