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1) Measure all of the income in an economy (wages, taxes, transfers, etc.).
2) Measure the value-added on goods (i.e.) the change in value when wood is turned into a chair).
3) Measure all expenditure (consumption, investment, government spending, etc.).
All three of these methods are used in income accounting and should always end up with the same result. This is because all income in an economy must be expended and the value of the expenditure and income is equivalent to the value of production (value-added to goods).
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