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Ans – (b) Explanation:- Money won in a lottery is a kind of transfer payment and does not add to the current flow of goods and services. Thus it would not be included in the national income.

Ans – (c) Explanation:- Service sectors such as transport, banking and shipping, and communication come under this sector. The tertiary sector provides services to the primary and secondary sectors.

Ans – (a) Explanation:- National product at current prices is measured at the current prevailing prices in the market. Whereas, national product at constant prices is measured at the base year price. If, current market price is higher than the…

Ans – (b) Explanation:- the following formula is justified from the Income method NDP at FC (Domestic Income) = Compensation of employees + Operating Surplus + Mixed Income of self employed GDP at MP derived from NDP at FC after…

Ans – (c) Explanation:- The following are the formulas of Gross Domestic Capital Formation = Gross Fixed Capital Formation + Change in stock Gross Domestic Capital Formation = Net Fixed Capital Formation + Consumption of fixed capital + Change in…

Ans – (d) Explanation:- All three methods are meant to calculate domestic income. By adding Net Factor income from abroad into it, we get National Income. it would be more clear from following formulas: Value-added Method Formula to Calculate National…

Ans – (b) Explanation:- The measurement of national income at constant prices is called Real National income. It is measured at the constant base year price and changes when the quantity produced changes. As it gives the idea of real…

Ans – (c) Explanation:- the sum of net value added at factor cost of all the producing units is equal to the Net domestic product at factor cost.

Ans – (a) Explanation:- As savings are assumed to be zero Net value added at factor cost of producing unit is equal to sum of factor payments made to the factors of production.

Ans – (b) Explanation:- Change in stock = Closing stock – Opening stock Change in stock is negative when closing is less than the opening stock