Final answer:
The Income Approach is commonly used to measure GDP by adding up all the incomes from wages, interest, rent, and profits in a year, providing insight into income distribution and economic well-being.
Step-by-step explanation:
The Income Approach method is most commonly employed when measuring a nation's gross domestic product (GDP) through national income.
Instead of the Expenditure Approach, which tallies the total amount spent on goods and services, the Income Approach adds up all the incomes earned in a year from wages, interest, rent, and profits to estimate GDP.
This approach works on the premise that all output produced will generate an equivalent amount of income, making GDP and national income broadly interchangeable terms.
The Income Approach provides insight into the distribution of income within an economy and is useful for analyzing economic well-being and policy impacts.