Final answer:
The capitalization approach using a Gross Multiplier Rent Method (GMRM) involves multiplying the gross rent by a multiplier to estimate property value. The GRM is based on market data and is used in real estate valuation. In contrast, GDP can be measured using the National Income Approach, which sums up all income produced in a year.
Step-by-step explanation:
The capitalization approach using a Gross Multiplier Rent Method (GMRM) means to multiply the gross rent by a multiplier. This method is commonly used in real estate appraisal and valuation. The gross rent multiplier (GRM) is a figure that, when multiplied by a property's gross rental income, produces an estimate of the property's value. For example, if a property's annual gross rent is $30,000 and the typical GRM for similar properties in the area is 10, then the estimated value of the property is $300,000 (30,000 x 10). The GRM is derived from market data, which can include the sale prices and rental incomes of comparable properties. Therefore, it represents how many years of gross rent a property would take to pay for itself in a perfect market scenario. This calculation is a simplified method and does not take into account operating expenses, vacancy rates, or changes in market conditions, which can all affect a property's actual value.
Another method for measuring economic output mentioned in the information provided is the National Income Approach to GDP. This approach adds up all the income produced in a year to measure GDP, treating it as equivalent to the total national income. The national income includes wages and salaries, interest and dividends, rent for land, profit for entrepreneurs, and is an alternative to the Expenditure Approach, which focuses on the total spending on a nation's goods and services.