Answer to Question #77195 in Microeconomics for David

Question

In a two sector model ,demonstrate with the aid of appropriate diagram that the three approaches of measuring national income of a country yield identical results.

Answer 1

The three alternative methods used for measuring national income are as follows:
1. Value Added Method
2. Income Method
3. Expenditure Method.
Since factor incomes arise from the production of goods and services, and since incomes are spent on goods and services produced, three alternative methods of measuring national income are possible.
Source:
https://www.economicsdiscussion.net/national-income/3-alternative-methods-used-for-measuring-national-income/799