The total output of the economy is the sum of the outputs of every industry. Gross National Income (GNI) is a measurement of a country's income. PRODUCT METHOD (Value added method): Theory-only the value of final goods is to be included; otherwise there arises a problem of double counting. National income is one of the broad indicators of a nation’s economic activity and the formula for it can be derived by subtracting domestic production by non-national residents and imports from the sum of consumption, government expenditures, investments, exports and foreign production by national residents. Similar timing issues can also cause a slight discrepancy between the value of goods produced (Product) and the payments to the factors that produced the goods (Income), particularly if inputs are purchased on credit, and also because wages are collected often after a period of production. Mathematically, it is represented as,Let’s take an example to understand the calculation of the National Income in a better manner.National Income of Nation is calculated using the formula given belowTherefore, the national income of the nation stood at $25 trillion during the year.National Income of the nation is calculated using the formula given belowTherefore, the country managed national income of $3,300 billion during the year.The formula for national income can be derived by using the following steps:It is important to understand the concept of national income because economists use it as an alternative to compare a nation’s performance across different quarters of the year or same quarters of different years. Note that all three counting methods should in theory give the same final figure. The expenditure approach is basically an output accounting method. Also, a correction term must be introduced to account for imports and exports outside the boundary. Because of the complication of the multiple stages in the production of a good or service, only the final value of a good or service is included in the total output. The basic formula for domestic output takes all the different areas in which money is spent within the region, and then combines them to find the total output. It's possible to express the income approach formula to GDP as follows: ... Total national income is equal to the … The names of the measures consist of one of the words "Gross" or "Net", followed by one of the words "National" or "Domestic", followed by one of the words "Product", "Income", or "Expenditure". This is acceptable to economists, because, like income, the total value of all goods is equal to the total amount of money spent on goods.

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