Arrange the following steps in calculation of National Income by "Income method" in the correct sequence:
- Add net factor income from abroad to arrive at National Income
- Estimate the factor income paid by each sector
- Identify and classify the income-generating units
- Calculate domestic factor income
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
Following are the steps in the correct order for the calculation of the National income with the help of "Income method":
- Identification and classification of various income-generating units
- Estimation of the factor income paid by each sector
- Calculation of the Domestic factor income (NDPFC) = Compensation of employees + Operating Surplus + Mixed Income of Self-employed
- Add net factor income from abroad to arrive at National Income/ Calculation of National income (NNPFC) = NDPFC + NFIA