Explain in short the income approach to evaluate national income.
Answer: Under income method to compute the National Income, the steps given below have been taken into account:
A) First of all production units that use factor services are recognized.
B) Estimate the given factor incomes:
• Compensation of employees
• Rent, Interest, Profits
• Mixed Incomes.
C) The sum total of the above factor income is NDPFC
D) Add net factor income from abroad to NDPFC to reach at National Income.