Which of the following aggregates is known as national income?
Answer and explanation
Correct answer: Net National Product at Factor Cost (NNP at FC)
National income is defined as Net National Product at Factor Cost, or NNP at FC. It measures the net factor income earned by the normal residents of a country during an accounting period. “National” includes net factor income from abroad, “net” means depreciation has been deducted, and “factor cost” excludes net indirect taxes. Therefore, option C is correct; NDP at FC is domestic rather than national.
Frequently asked questions
What is the correct answer to this question?
Net National Product at Factor Cost (NNP at FC)
Why is this the correct answer?
National income is defined as Net National Product at Factor Cost, or NNP at FC. It measures the net factor income earned by the normal residents of a country during an accounting period. “National” includes net factor income from abroad, “net” means depreciation has been deducted, and “factor cost” excludes net indirect taxes. Therefore, option C is correct; NDP at FC is domestic rather than national.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - NNP.
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