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Ans – (b) Explanation:- American company in England lies in the domestic territory of England. Income earned from the domestic territory of England by residents and non-residents (Indian) is included in the domestic income of England.

Ans – (a) Explanation:- GNP at the constant prices is calculated at the base year price. It changes only when the quantity produced changes. Increasing production is an indication of the growing country as it generates employment and increases the…

Ans – (b) Explanation:- National Income includes only factor income that adds to the current flow of goods and services.

Ans – (d) Explanation:- (a) The sale of bonds by a company is merely an ownership transfer of financial assets and it does not add to the current flow of goods and services. (b) The transport expenses by a firm…

Ans – (d) Explanation:- Services provided for self-consumption are neither included in national income nor in domestic income. Piyush’s Mother teaches Piyush are the service for the self-consumption. The market value of services for the self consumption can not be…

Ans – (d) Explanation:- National Income can be calculated by 3 methods: Value-added Method Income Method Expenditure Method The value of National Income is the same for all three methods. because these are the three phases of the circular flow…

Ans – (c) Explanation:- The broker makes the sale and purchase happen by providing his services as a mediator. His services are productive service as it adds to the current flow of goods and services in the economy. Thus, the…

Ans – (d) Explanation:- Gross Domestic Capital Formation is the addition to the present stock of capital during the year. This investment can be in fixed capital and inventory. Thus it is calculated with the following formulas: Gross Domestic Capital…

Ans – (c) Explanation:- Domestic Income = Compensation of employees + Mixed Income + Rent and royalty + Interest + Profit Domestic Income = Compensation of employees + Income of self-employed + Operating Surplus Here operating surplus is equal to…

Ans – (c) Explanation:- Operating Surplus is the sum of income from property and income from entrepreneurship Income from Property = Rent + Royalty + Interest Income from Entrepreneurship = Profits Operating Surplus = Rent + Royalty + Interest +…