Measurement of National Income


Income is generated in the process of production. The aggregate measure of this income is known as national income. Technically speaking national income is the sum total of factor incomes accruing to the residents of a country from their contribution to production activity both within and outside the domestic territory. It is NNPFC National income (NNPFC ) of a country can be measured in three alternative ways:

 

(i) As a flow of goods and services, i.e., net value added by the different producing sectors of the economy.

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(ii) As a flow of factor income, i.e., the income generated during the production process in the domestic territory of the country and net flow of factor income from abroad.

 

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(iii) As a flow of expenditure, i.e., the disposition of income by the spending units in the economy.

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