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Ans – (b) Explanation:- Corporation tax is already included in the profit. Adding it separately to the national income would result in double counting. National Income = Compensation of Employees + Mixed Income + Rent (Royalty) + Interest + Profits…

Ans – (c) Explanation:- Broker provides his expertise services that help in the sale and purchase of financial assets. His services are productive services and add to the current flow of goods and services in the economy. Thus, broker’s commission…

Ans – (a) Explanation:- A Festival gift from the employer is the transfer payment as employees do not provide any productive (factor) services against it. House rent allowance and payment of bonus to employees are part of wages and salaries…

Ans – (d) Explanation:- A loan taken from a bank by an individual for a car is for consumption purposes. The car is used for personal purposes and is not used for any productive purposes. Thus, the interest paid on…

Ans – (b) Explanation:- Employees working permanently in an international organisation are considered as residents of the country where this international organisation is situated. Thus, an Indian working permanently in UNESCO office in New York is a resident of the…

Ans – (d) The double counting can be avoided in two ways. i) only counting the value of the Final Output ii) Counting only value-added it also means not counting the value of intermediate products. For Example:- The farmer produces…

Ans – (d) Explanation:- Is is the final good as it is purchased for investment purposes. It is the capital good as it would be used in the further production.

Ans – (a) Explanation:- A rise in the real national income indicates an increase in the production. An increase in production indicates a rise in employment. The rise in employment increases in income and further standard of living.

Ans – (c) Explanation:- Factor income paid to non-residents within the domestic territory increases the domestic income as Domestic income is the income earned from the domestic territory by both residents and non-residents. Factor income paid to non-residents decreases the…

Ans – (c) Explanation:- National income is the income earned by the residents of a country within the domestic territory and from the rest of the world.