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Friday, 18 May 2018

National income by factor income method

Points to remember while calculating National income by factor income method:

Often asked in CBSE board examination , students must remember classification of factor income while calculating National income by income method. Here is classification given:

Factor income is divided into three parts

1. Compensation of Employees:

Wages & salaries in cash
Wages & salaries in kind
Social security contribution
Retirement pension


2. Operating surplus:

Profit -  ( corporate tax, Undistributed profit, dividend)

Rent
Interest

3. Mixed income


It is often observed that head and subheads are mentioned together in question. Students often count double while solving problem. E.g profit is given 300 crore and dividend is also given 100 crore. In this case ignore dividend because dividend is a part of profit already added.

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