While computing the national income,___________is taken as a factor.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Export.
When calculating national income, the focus is on the value of goods and services produced by the factors of production. Therefore, 'Export' is the most relevant factor among the options provided.
- Export:
- Exports represent goods and services produced domestically and sold to foreign consumers. This directly contributes to a nation's output and, therefore, its national income.
- It's a key component of the expenditure method of calculating GDP, which is a primary measure of national income.
Other Options:
- Chemical used:
- Chemicals used are intermediate goods, meaning they're used in the production of final goods. While they contribute to production, their value is already included in the final product's price. Therefore, they're not directly counted to avoid double-counting.
- Electricity bill:
- An electricity bill represents a cost of production or consumption. It's a financial transaction, not a direct measure of the value of goods and services produced.
- Road construction:
- Road construction is a form of government expenditure, which is a component of national income calculation. However, the act of road construction is a government expenditure. The value of the work done is what is factored into national income.
In essence, national income accounting aims to capture the value of final goods and services produced, and exports play a direct role in that.