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Q: The aggregate value of goods and services produced in an economy can be calculated by three methods: income method, expenditure method and ––––– method
  • A. product/value added
  • B. spending
  • C. deposit
  • D. lending
Correct Answer: Option A - Value added product method, Income method, Expenditure method are different ways to calculate National income. 1) Product Method/Value Added Method– It is based on net value added to the product at every stage of production. Its shows the contribution of each sector. 2) Income Method– it shows the contribution of different earning groups in the economy. 3) Expenditure Method–National Income is measured by adding up the expenditure made by individuals, companies and the government.
A. Value added product method, Income method, Expenditure method are different ways to calculate National income. 1) Product Method/Value Added Method– It is based on net value added to the product at every stage of production. Its shows the contribution of each sector. 2) Income Method– it shows the contribution of different earning groups in the economy. 3) Expenditure Method–National Income is measured by adding up the expenditure made by individuals, companies and the government.

Explanations:

Value added product method, Income method, Expenditure method are different ways to calculate National income. 1) Product Method/Value Added Method– It is based on net value added to the product at every stage of production. Its shows the contribution of each sector. 2) Income Method– it shows the contribution of different earning groups in the economy. 3) Expenditure Method–National Income is measured by adding up the expenditure made by individuals, companies and the government.