Which of the following aggregates best describes the National Income?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. NNP at FC.
The aggregate that best describes the National Income is Net National Product at Factor Cost (NNP at FC).
National Income refers to the total value of all final goods and services produced by a country’s residents in a given period, measured at factor cost. It is calculated by subtracting depreciation from the Gross National Product (GNP) and adjusting for indirect taxes and subsidies. Net National Product at Factor Cost reflects the actual income earned by the factors of production, making it the most accurate measure of National Income.