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While computing National Income estimates, which of the following is required to be observed?
406 0 6513d92c56a7b2508cb93ecf- 1The value of exports to be added and the value of imports to be subtractedtrue
- 2The value of exports to be subtracted and the value of imports to be addedfalse
- 3The value of both exports and imports to be addedfalse
- 4Thevalue of both exports and imports to be subtractedfalse
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Answer : 1 The value of exports to be added and the value of imports to be subtracted
Explanation :
National Income of a country can be defined as the total market value of all final goods and services produced in the economy in a year. In expenditure method, the National Income is measured by adding up the four flows, - namely C, I, G, X and M.
Thus, Y = C+1+G + (X-M) + (X- M) Where,
C = Total consumption expenditure
I = Total investment expenditure
G = Total government expenditure
X = Export,
M = Import
Which one of the following is not included while estimating National Income through income method?
405 0 6513d88ccb11fc5036eb8cf5- 1Rentfalse
- 2Mixed Incomefalse
- 3Pensionfalse
- 4Undistributed Profitstrue
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Answer : 4 Undistributed Profits
Explanation :
Income method measures National Income from the side of payments made to the primary factor of production for their productive services in an accounting year.
The components of factor income are (i) Employee’s Compensation, (ii) Profit, (iii) Rent, (iv) Interest, (v) Mixed income and (vi) Royalty.
Profit, rent, interest and other mixed income are jointly known as operating surplus.
- 1Indirect taxtrue
- 2Capital consumption allowancefalse
- 3Subsidyfalse
- 4Interestfalse
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Answer : 1 Indirect tax
Explanation :
The difference between Gross National Product and Depreciation is called Net National Product (NNP). NNP at factor cost is the net output evaluated at factor prices. It includes income earned by factor of production through participation in the production process, such as wages and salaries, rents, profits etc.
It is also called National Income. NNPFC = NNPmp – Indirect taxes
+ Subsidies = National Income. But now NNPMP is National Income
Which one of the following is the most appropriate reason for inequalities in income?
369 0 6513d6c7cb11fc5036eb8684- 1Racial factorsfalse
- 2Lack of opportunitiestrue
- 3Inheritance from family environmentfalse
- 4Differences in abilityfalse
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Answer : 2 Lack of opportunities
Explanation :
In India, on the one hand, Per Capita Income is low and on the other hand, there is large inequality in the distribution of wealth and income, according to Human Development Reports. Lack of opportunity means that its most valuable assets its people is not being fully used. It is appropriate reason of income gap.
- 1National Income/Total population of the countrytrue
- 2National Income + Populationfalse
- 3National Income - Populationfalse
- 4National Income x Populationfalse
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Answer : 1 National Income/Total population of the country
Explanation :
The average income of the people of a country in a particular year is called Per Capita Income for that year. So, it is National Income divided by population.
Per Capita Income
= National Income/Total population of the country
Though Per Capita Income is more reliable than GNP for many particular purpose.