The following methods are used in calculation of National Income EXCEPT

Analyze the question: It asks which option is NOT a method of calculating National Income.

Concept: National Income is measured in three standard ways:

1. Income approach: adds up all incomes earned (wages, rent, interest, profit).
2. Expenditure approach: adds up all spending on final goods and services (C + I + G + (X − M)).
3. Output (or Product) approach: adds up the value of all goods and services produced. This is often done using value added, i.e. the value added at each stage of production, which avoids double counting.

Checking each option:

• A. Depreciation: this is the wear and tear of capital goods. It is an adjustment used when moving from GNP to NNP (NNP = GNP − Depreciation). It is not a method of measuring national income.
• B. Expenditure: a valid method.
• C. Income: a valid method.
• D. Output: a valid method.
• E. Value added: a valid way of applying the output approach, so it is generally accepted as a method.

Answer: The exception is depreciation, which is option A.

Tip: Remember the three methods as I-E-O: Income, Expenditure, Output. Depreciation is only a deduction (capital consumption allowance) and never a method. When a question says "EXCEPT," look for the option that is an adjustment or item rather than an approach.