Income Approach
Definition
The income approach is one method used to calculate a country's gross domestic product (GDP). It measures GDP by adding up all incomes earned within an economy, including wages, rents, profits, and interest.
Related terms
Expenditure Approach: The expenditure approach is another method used to calculate GDP. It measures GDP by summing up all final expenditures made within an economy, such as consumption, investment, government spending, and net exports.
National Income Accounting: National income accounting refers to the methods used to measure an economy's overall performance through indicators like GDP.
Disposable Income: Disposable income represents the amount of money individuals have available after paying taxes. It can be spent or saved at their discretion.
"Income Approach" appears in:
Additional resources (1)
AP Macroeconomics - Unit 2 Overview: Economic Indicators and the Business Cycle
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Cram Mode
AP Score Calculators
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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.