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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
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…