National Income — Economics STD 12 Commerce / Arts — Question

1. It is the sum of income earn by all factors of production in a year.
2. In this method, national income is estimated from the distribution side
3. Symbolically – NI = R + W + I + MI + (X-M)
4. This method is extremely popular in developed countries.

Expenditure Method:

1. It is the sum of expenditure incurred by private sector and government on consumption and investment in a year.
2. In this method, national income is estimated from the expenditure side.
3. Symbolically -NI = C + I + G + (X-M) + (R-P)
4. This method is very rarely used by any country.