National income is referred to as the total monetary value of all services and goods that are produced by a nation during a period. In other words, it is the sum of all the factor income that is generated during a production year.
National income serves as an indicator of the nation's economic activity. It can be calculated by three methods such as income method, value-added method, and expenditure method.
The income method is mainly based on the incomes generated by the factors of production such as labor and land. The expenditure method is based on investment and consumption, while the value-added method is mostly based on the value added to a product during the stages of production.
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