CBSE Class 12-commerce Answered

National income can calculated using three methods: Product Method, Income Method and Expenditure method

Income method:
According to this method national income is measured in terms of factor payments to the owners of the factors of production during an accounting year. These factor payments include compensation to employees, rent, interest and profit.

Expenditure method:
According to this method, national income is measured in terms of expenditure on the purchase of final goods and services produced in the economy during an accounting year.