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names of the methods to compute output ?
There are 3 methods to calculate the output which are as follows:-
(A)Value added method
Under this the value of the final goods and services are taken into account to calculate the GDP of the country. It is given by the formula:-
GDPMP = Value of output - Intermediate Consumption
Where Value of output = Sales + change in stock
And sales= Domestic sales and exports
(B) Income method
Under this the amount of factor income of each producing unit is taken into account.
The formuls for NDPFC = Operating surplus + Compensation of the employees + Mixed income of self employed.
Adding this to NFIA we get:-
NNPFC = NDPFC + NFIA
(C) Expenditure method
It accounts for the identification of economic units incurring final expenditure which includes households, goverment and firms
The formula is :-
GDPMP = Private final consumption expenditure, Goverment final consumption expenditure + Gross domestic capital formation + Net exports