What is the third method, in addition to the income method and expenditure method, used to calculate the aggregate value of goods and services produced in an economy?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. Product/Value Added.
- The national income of a country can be assessed through three different approaches: (i) the Product Method, (ii) the Income Method, and (iii) the Expenditure Method.
- In the Product Method, the national income is evaluated as the flow of goods and services.
- Using the Income Method, the national income is determined as the flow of factor incomes.
- With the Expenditure Method, the national income is computed as the flow of expenditure.