News Production Approach Of National Income Accounting
According to this method, national income is measured inwards the course of report of full production obtained from each economical sector such equally primary, secondary too 3rd sectors. The production approach consists the following:
Primary Sector
It includes agriculture based productions similar fishery, forestry, too other production activities.
Secondary Sector
It includes manufacturing, electricity, H2O furnish too such other world welfare activities.
Tertiary Sector
It includes banking, insurance, carry too communication, defense, management too such other institutions. Thus,
GDI=Total Production of (Primary Secondary Tertiary)sector
GNP=GDP NFIA
In gild to solve this problem, nosotros tin laissez passer on the axe either of purpose the next ii methods:
1. Final Product Method
GNP is the coin value of lastly goods too services produced during a year. So, national income is measured past times finding the marketplace value of all lastly goods too services produced inwards the economic scheme during a year.
2. Value Added Method
In this approach, the value added at dissimilar stages of production is calculated too and therefore for estimating national income. According to this approach, national income is the total full of value added past times dissimilar producing units of a province inwards their production process. Thus,
Value Added=Value of Output-Cost of the Goods