Explanation
Net factor income earned from abroad which is used to differentiate between national income and domestic income. Alternatively NFIA is the difference between factor incomes received from abroad and factor income paid abroad. Net factor income from abroad is the difference between the factor income earned from abroad by normal residents of a country (say, India) and the factor income earned by non-residents (foreigners) in the domestic territory of that country (i.e., India). Hence, correct answer is option A.
The method used to calculate the income by adding all the expenditures on the purchase of final goods and services produced during an accounting year is __________.
The method used to calculate the income by adding all the expenditures on the purchase of final goods and services produced during an accounting year is called expenditure method
Expenditure method: national income is measured as a flow of expenditure. Includes sum total of private consumption expenditure. Government consumption expenditure, gross capital formation (Government and private) and net exports (Export-Import).
National income can be calculated by three methods:
National Income is the total amount of goods and services produced within the nation during the given period say, 1 year. It is the total of factor income i.e. wages, interest, rent, profit, received by factors of production i.e. labor, capital, land, and entrepreneurship of a nation.
Average income = Total Income/ Total number of persons = (4000+5000+6000+7000)/4
= 5500
If the national income is measured as an aggregate value of all final goods and services produced by all the firms it is called _______.
National income is measured as an aggregate value of all final goods and services produced by all the firms it is called product method.
Product method: in this method national income is measured as money value of all final goods and services produced in an economy during a year. Final goods here refer to those goods which are directly consumed and not used in further production process.
Income disposal method is also called as _________.
Expenditure method is also called as income disposal method
Expenditure method: National income is measured as a flow of expenditure. Includes sum total of private consumption expenditure. Government consumption expenditure, gross capital formation (Government and private) and net exports (Export-Import).
Suppose that a firm had an unsold stock worth of Rs 100 at the beginning of a year. During the year it had produced Rs 1,000 worth of goods and managed to sell Rs 800 worth of goods. Calculate inventory for the year ___________.
Which of the following are the methods of calculating national income?
Three methods of calculating national income are product method, income method and expenditure method
The stock of unsold finished goods, or semi-finished goods, or raw materials which a firm carries from one year to the next is called __________.
The stock of unsold finished goods, or semi-finished goods, or raw materials which a firm carries from one year to the next is called inventory
Inventory is a stock variable. It may have a value at the beginning of the year; it may have a higher value at the end of the year
The value-added method of calculating national income is also called as:
The value added method of calculating national income is also called as product method
Product method: In this method national income is measured as money value of all final goods and services produced in an economy during a year. Final goods here refer to those goods which are directly consumed and not used in further production process.
When value added by each and every individual firm is added, we get the value of national income.
Which of the following is not included in expenditure method of calculating national income?
It does not include expenditure on second hand goods.
What is the reason/s for the unequal distribution of national income?
Countries especially like India faces a great deal of unequal distribution of wealth. The main reasons for this include the people leaving behind an immense properties to their inherits, private property possession is another reason, difference in natural quality can be considered as one of the reason, for example a person born in rich family receives proper education even though he has a mediocre ability and exactly opposite happens for an intelligent born in poor family.
Which of the following method uses adding up of factor payments received during a year to calculate national income?
Income method uses adding up of factor payments received during a year to calculate national income.
Income method: according to this method income is measured as flow of factors income. There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.
Central statistical organisation is responsible for statistical activities in India. The CSO was set up in the cabinet secretariat on 2 May 1951.
The national income estimation is the responsibility of central statistical office.
Which of the following statements are true?
i. Gross Domestic Product is the monetary value of all final goods and services produced in the economy within the year.ii. Depreciation is deducted from gross value to get the net value
Which of the following poses a problem in calculating national income?
There are few difficulties associated with calculation of national income which include
Apart from these the other problems involved are
i. CSO is a premier statistical institution for collecting data in India
ii. CSO presents the national income estimates twice a year.
Among the given options only first statement which states that CSO is a premier statistical institution for collecting data in India is true. The second statement is false because it estimates only once a year but not twice.
A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves) is called __________.
A sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves) is called a dividend
The value of national income adjusted for inflation is called _______.
The value of national income adjusted for inflation is called Real national income. This is adjusted for inflation which is calculated from a reference year which is also called as base year.
CSO which takes up the responsibility of estimating national income stands for __________.
CSO which takes up the responsibility of estimating national income stands for Central Statistical Organisation. This organisation is responsible for co-ordination of statistical activities in India. Its activities include national income accounting, conduct of annual survey of industries, economic censuses and its follow up surveys, compilation of index of industrial production, human development statistics, gender statistics etc.
Which of the following is included in factor payments?
Factor payments include Interest, Profits, Rent and also royalty
There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.
Which one is not a major cause of income inequality in India?
Countries especially like India faces a great deal of unequal distribution of wealth. The main reasons for this include the people leaving behind an immense properties to their inherits, private property possession is another reason, difference in natural quality can be considered as one of the reasons. Gap between rich and poor and increased population are other causes for unequal distribution of wealth.
Among the given options lack of fertile land cannot be considered as the reason for income inequalities.
Per capita income or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.
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