National income at constant prices means:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. income estimated at base year prices.
National income at constant prices refers to income estimated at base year prices. This method eliminates the effects of inflation or deflation by using the prices from a specific base year for comparison. It provides a more accurate measure of an economy’s real growth, as it reflects changes in the quantity of goods and services produced rather than price fluctuations. This helps in assessing the actual economic progress over time without the distortion caused by changes in price levels.