Which of the following is NOT a method of measuring national income?

The correct answer is the Intermediate goods method.

Key Points

• Expenditure method 
  • The expenditure method is a system for calculating gross domestic product (GDP) that combines consumption, investment, government spending, and net exports.
  • It is the most common way to estimate GDP. It says everything that the private sector, including consumers and private firms, and government spending within the borders of a particular country, must add up to the total value of all finished goods and services produced over a certain period of time.
  • This method produces nominal GDP, which must then be adjusted for inflation to result in the real GDP.
• Product Method:
  • The product or value-added method is a way of computing the national income of a country.
  • This system is also known as the output or inventory method. This method calculates national income by adding value to a product at every stage of its production.
• Income Method:
  • In the income method, the national income is measured by adding up the pretax income generated by the individuals and companies in the economy.
  • It consists of income from wages, rent of buildings and land, interest on capital, profits, etc.

Additional Information

• The expenditure on construction is calculated either by finding out the total money spent on new construction or by adding up the value of inputs used in construction.
• The expenditure on material inputs consists of expenditure on cement, steel, bricks, wood, fixtures and fittings. Besides, factor income payments to labour and capital are to be added with the expenditure on inputs to find out the value of construction.