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National Accounts using output approach

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Topic updated on 02/14/2019 10:33am

Estimating National production based on Output flow, is named output approach.

When calculating national accounts with output approach, multiple counting can occur.

To avoid multiple counting, two methods can be used.

  • Final product method.
  • Value added method.

 

  • Final product method includes only the final values of consumer goods , Investment
    goods and services.
  • The total of value added of all sectors as agriculture, industry and services is termed
    Gross Domestic Production.
  • Value added can be calculated with the difference between total value and inputs.
  • Value added is explained as all new values which are added to the production process
    at different times.
  • It includes, the payments for factor services, net indirect taxes and depreciation

 

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