Expenditure Method - National Income

Expenditure Method : 

The expenditure approach measures national income as total spending on final goods and services produced within nation during a year. The expenditure approach to measuring national income is to add up all expenditures made for final goods and services at current market prices by households, firms and government during a year. Total aggregate final expenditure on final output thus is the sum of four broad categories of expenditures: (i) Consumption (ii) Investment (iii) Government and (iv) Net export. (i) Consumption expenditure (C) : Consumption expenditure is the largest component of national income. It includes expenditure on all goods and services produced and sold to the final consumer during the year. 

 

(ii) Investment expenditure (I) : Investment is the use of today's resources to expand tomorrow's production or consumption. Investment expenditure is expenditure incurred on by business firms on (a) new plants, (b) adding to the stock of inventories and (c) on newly constructed houses. 

 

(iii) Government expenditure (G) : It is the second largest component of national income. It includes all government expenditure on currently produced goods and services but excludes transfer payments while computing national income. 

 

(iv) Net exports (X - M) : Net exports are defined as total exports minus total imports. National income calculated from the expenditure side is the sum of final consumption expenditure, expenditure by business on plants, government spending and net exports. 

Buy Class:https://www.conceptonlineclasses.com/courses/full_course/c-s-e-e--t

Visit Website:https://www.conceptonlineclasses.com/

#ExpenditureMethodNationalIncome

Latest Blogs

Salary of a Qualified CMA

Salary of a Qualified CMA

Best Career Option After Class 12th

Best Career Option After Class 12th

Why to choose career in "CMA" ?

The Reasons to Choose a Career in "CMA"

What Is Balance ScoreCard

What Is Balance ScoreCard A balanced scorecard is a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes. Balanced scorecards are used to measure and provide feedback to organizations. #BalanceScoreCard

The Importance of Cost Management Accounting

Top Reviews

Introduction to Statistics for CA Foundation

Introduction to Statistics for CA Foundation Business Mathematics, Logical Reasoning and Statistics is designed as per latest CA Foundation syllabus for Paper 3 to provide a firm grounding in the principles, techniques and practice. The book adopts self-study approach and has been written in student-friendly manner. With a blend of conceptual learning and problem-solving approach, it offers in-depth understanding of the basic mathematical and statistical tools. #introductiontostatistics

Chapter X of Companies Act 2013

Chapter X of Companies Act 2013 The company shall place the matter relating to such appointment for ratification by members at every annual general meeting. ... Under the Act, the provisions for rotation of auditors in the listed Company & certain other class of Companies, have been provided for. #chapterxofcompaniesact2013

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements

Relevant sections under the Companies Act, 2013 dealing with fraud and false statements The new parent corporate law “The Companies Act 2013” is mostly ... I am limiting my write-up to the provisions to the Act, and I request the readers to refer relevant rules, if any, before ... in the 2013 Act is the Section 447 dealing with “Punishment for fraud”. ... Section 448

What is Corporate Image

What is Corporate Image A corporate identity or corporate image is the manner in which a corporation, firm or business enterprise presents itself to the public. The corporate identity is typically visualized by branding and with the use of trademarks, but it can also include things like product design, advertising, public relations etc #WhatisCorporateImage

What is Energy Audit

What is Energy Audit An energy audit is an inspection survey and an analysis of energy flows for energy conservation in a building. It may include a process or system to reduce the amount of energy input into the system without negatively affecting the output. #whatisenergyaudit