Income Method of GNP Measurement

Income Method of GNP Measurement

Under income method of GNP measurement, all payment or cost of acquiring production factor is summed up. In other word income generated by the people (income of factor of production) are summed up.

1.    Wages

Under income method of GNP, wages are from a major part of production process. Wages are people remuneration against their services.

2.    Rents

Under GNP method rent income against use of building, machinery etc is also a key income element.

3.    Profit

Under income method of GNP, profit earned by the private firm is also included in the national income of the country.

4.    Business Taxes

Business taxes though not a factor of production, but still incurred by the business man as result of production, and therefore included as payment for production.

5.    Depreciation

Under income GNP method, where production cost are included for calculating GNP, deprecation is also included being a cost of production.