consists of wages and salaries, rent, net interest, corporate profit and private income
EXPENDITURE APPROACH
Is influenced by the standard of living BUT not suitable to be used to measure the growth of an economy over time
The total income receive and available for an individual to spend on goods and services produced by an economy
The average income of the citizens of a nation, calculated by dividing the national income for a certain year by the population at the year
The value of GDP does not take into account whether the factors of production are owned by local citizens of other nations.
The total final value of goods and services produced by factors of production owned by citizens of the nation, regardless of where they are located, within one year.
the prevailing price in the market through the forces of demand and supply.
the sum of all income earned by all the factors of production and helps to produce the year’s national output in the economy.
excluded the contribution to production made by foreign citizens working in the nation
GNP - DEPRECIATION
This income can be spent, used to pay taxes or be saved
Obtained when the value of depreciation is subtracted from the GNP
It is the actual price that consumers have to pay to get the product or service.
INCOME APPROACH
is total product value of final goods and services produced by the nationals of a country for a particular period of time
The income received by an individual or households as payment for factors of production or as payment for items other than factors of production in an economy in a year
Not all personal income is available to be spent or saved, as apportion must be used to pay personal income tax to government or zakat
The total final value of goods and services created by factors of production available within a nation in one year
It is the real price earned by producers or sellers
