Final answer:
GDP can be measured by summing up all the income produced in a year, which encompasses wages, interest, rent, and profits. This method is known as the National Income Approach.
Step-by-step explanation:
Gross Domestic Product (GDP) can be measured by adding up all the income produced in a year, providing a comprehensive way of measuring a nation's economic activity. This approach to calculating GDP sums the income received by all factors of production in an economy, which includes wages for labor, interest and dividends for capital, rent for land, and profits for entrepreneurs. This method of measuring GDP is often referred to as the National Income Approach, highlighting that the total value of a nation's output is equivalent to the total value of the nation's income. This perspective ensures that all sales of final goods and services end up in the GDP calculations, avoiding the problem of double counting.