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Income approach to evaluate national income

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.

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