Income Approach Of Gdp

Gdp can be measured in three ways.

Income approach of gdp. Gdp by income approach similar to gdp by production approach also aims at measuring value added but there are two fundamental differences between the two approaches. Sales taxes describe taxes imposed by the government on the sales of goods and services. Gross domestic product by income approach. This is adjusted to yield net national product nnp gross national product gnp to gdp.

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. The first one is that gdp by income approach measures gdp as the sum of all components of value added while gdp by production approach measures value added as a residual. Starts with income earned by the factors of production wages interest rent and profits. The production approach the income approach and the expenditure approach.

The income approach to measuring the gross domestic product gdp is based on the accounting reality that all expenditures in an economy should equal the total income generated by the production. This gives national income ni.