Question

Which sequence correctly states the steps of the Income Method?

Options

• Identify production units → Classify factor incomes → Calculate \[NDP_{FC}\] → Add \[NFIA\] to get \[NNP_{FC}\]

• Add \[NFIA\] → Identify production units → Calculate \[NDP_{FC}\] → Classify factor incomes

• Add second-hand goods → Add gifts → Calculate \[NDP_{FC}\] → Subtract profits

• Classify transfer payments → Add capital gains → Calculate \[NNP_{FC}\] → Exclude wages

Answer 1

The procedure begins by identifying production units and classifying factor incomes. Their sum gives \[NDP_{FC}\], after which \[NFIA\] is added to obtain \[NNP_{FC}\].