Multiple choice

The three methods of computing national income are

  1. outlay, depreciation and production method

  2. production, outlay and income method

  3. balance of payment, income and consumption method

  4. saving, investment and income method
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B Correct answer
Explanation

National income can be measured through three equivalent approaches: the production (value-added) method sums output at each stage, the outlay (expenditure) method sums total spending on final goods, and the income method sums all factor incomes earned. These three methods must theoretically yield the same result because every rupee spent is someone's income.

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