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Hiral Jain

Content writer • 1y

Hey there, folks! Did you know that countries have not one but three methods to calculate their national income? And each method is unique in its way. The method used to calculate a country's GDP is the Product Method, also known as the Value-Added Method. This involves adding up the value of all final goods produced in the country during a year. The Income Method adds up all the income earned by factors of production like Land, Labor, Capital, and Entrepreneurship. Finally, The Expenditure Method adds up spending across all sectors. But here is the kicker, National Income is calculated differently by each country due to their unique tax and economic systems, which can create imbalances in the calculation. For instance,India has a reputation for tax evasion and lack of tax literacy. This is why we are still a developing country, despite having the potential to do better. So, there you have it, folks - a little bit of trivia about how national income is calculated across the world.

13 Replies

Replies (13)

Arcane

Hey, I'm on Medial • 1y

Which method provides more accurate results for estimating the National Income of India?

2 Replies

Ananya Agarwal

Learning • 1y

Hehe, unit 1. Just got done with this one, you've put all of it really nicely together.

1 Reply

Anonymous 2

Hey I am on Medial • 1y

But who decides which is the right way? Where we can understand the ground reality.

1 Reply

PRATHAM
•

BeatStars • 1y

But how are these accounted by the government?

1 Reply

Anonymous 1
•

Wipro • 1y

This is so well put. Thanks 💯

Rana Pratap Singh

Blogger | Imaginativ... • 1y

[This post has been deleted by the creator]

Hiral Jain

Content writer • 1y

Hello everyone! To understand the topic of national income we need to have some basic knowledge of what we do at the end of every financial year (startups who hire a chartered accountant to file their ITRs or to look after their accounting) All these amounts are transferred to the gov And upon all the level (district,state, nation etc) (this is a simpler version to understand national income accounting) Whatever I have written above is a part of my CA foundation syllabus It comes under macro economics What say, isn’t commerce field interesting?!!

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Arey Mubarak Ho aapki lottery lagi hai, woh bhi 1cr kii!! We call this transfer payment in economics, it means the income that a person gets without providing service/goods. We all know that all of our income is calculated in national income irrespe

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