In _______________ method of calculating national Income, we calculate the aggregate annual value of goods and services produced (if a year is the unit of time).
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. product.
In the product method, national income is calculated by summing the aggregate annual value of all final goods and services produced within a country in a year. This avoids double-counting by excluding intermediate goods.
Other options:
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Loan – Incorrect, as loans are financial transactions, not production.
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Purchase – Incorrect, as purchases are part of expenditure method, not production.
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Tax – Incorrect, as taxes are government revenues, not a measure of production.
The product method focuses on production, while income and expenditure methods measure earnings and spending, respectively.