Practicing Success
Which of the following is true? a) National Disposable Income = Net National Product at Factor prices + Other current transfers from the rest of the world b) Expenditure on intermediate goods is included in the calculation of GDP. |
Both a and b are true a is true, b is not b is true, a is not Both a and b are false |
Both a and b are false |
The correct answer is Option 4: Both a and b are false Statement a: National Disposable Income = Net National Product at market prices + Other current transfers from the rest of the world. This is incorrect. The correct formula is : National Disposable Income = Net National Product at market prices (NOT FACTOR PRICE) + Other current transfers from the rest of the world Statement b : Expenditure on intermediate goods is included in the calculation of GDP. This is incorrect. Expenditure on intermediate goods is not included in the calculation of GDP as it would lead to double counting. Only the value of final goods and services are including while calculating GDP. |