Define or explain the following concepts: 2) National income

Define or explain the following concepts:

2) National income

Answer:  

2) National income is the total market value (in monetary terms) of all final goods and services produced by firms during an accounting year. In other words, it can be defined as the aggregate of all factor incomes flowing from the firms to the households (i.e. by aggregating the rent, wages, interest and profit earned in the economy). There are three methods of measuring national income, namely: value-added/ product method, income method and expenditure method.

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