Income Approach Formula Macroeconomics

National income or ni.

Income approach formula macroeconomics. According to the income approach gdp can be computed as the sum of the total national income tni sales taxes t depreciation d and net foreign factor income f. Formula for income approach it s possible to express the. The income approach starts with the sum of wage income plus interest rent and profit income. Macroeconomics 1 min read april 7 2019.

Learning objectivesincome approach to national income the formula to calculate national income by income methodincome approach to national income includes all the sum of income of an economy. Conversely the income approach starts with the income earned wages rents interest profits from the production of goods and services. Sales taxes describe taxes imposed by the government on the sales of goods and services. Ni wages interest rent proprietors income corporate profits.

Some adjustments need to be made in order to get from this number to gdp. Total national income is the sum of all salaries and wages rent interest and profits. It follows that the formula for national income is. To change the measure from factor cost to market price indirect taxes less subsidies are added because these are government taxes and transfers that affect market prices.