Income Approach Of Gdp Formula

First you may notice that government receipts are not part of this equation.

Income approach of gdp formula. This gdp formula takes the total income generated by the goods and services produced. The formula for calculating gdp by income approach is. Gdp compensation of employees rental royalty income business cash flow net interest. Ni wages interest rent proprietors income corporate profits from national income three more adjustments are needed in order to get to gdp.

In practice the formula for calculating gdp according to the income approach is expressed in the following way. Gdp total national income sales taxes depreciation net foreign factor income. According to the income approach gdp can be computed by finding total national income tni and then adjusting it for sales taxes t depreciation d and net foreign factor income f. The income approach is a way for calculation of gdp by total income generated by goods and services.

The income approach of gdp calculation is based on the total output of a nation with the total factor income received by residents or citizens of a nation. Gdp tni t d f. Gdp national income capital consumption allowance statistical discrepancy gdp n ational i ncome c apital c onsumption allowance s tatistical discrepancy. Gdp total national income sales taxes depreciation net foreign factor income.