Which of the following statements is true?

(A) Gross domestic income is a subset of national income.
(B) Corporate profit tax is a factor in income earned by the government.
(C) The production of wheat by a farmer retained by himself for his self-consumption will be included in the national income of the country.
(D) All capital goods are producer goods, but all producer goods are not necessarily capital goods.

Choose the correct answer from the options given below:

(C) and (D) only

The correct answer is Option (4) → (C) and (D) only

(A) Gross domestic income is a subset of national income. False. National Income (NNP at factor cost) is derived from Net Domestic Product plus Net Factor Income from Abroad (NFIA). Therefore, Gross Domestic Income is not a subset but a component used to derive National Income.

(B) Corporate profit tax is a factor in income earned by the government. False. Corporate Profit Tax is a compulsory transfer payment (a tax) and is a source of revenue for the government. The income earned by the government as a factor income would be from its ownership of land, capital, or entrepreneurship in government-owned enterprises (e.g., operating surplus of general government). Tax is part of the operating surplus of the corporate sector, which is then paid to the government, but it is not classified as a factor income for the government.

(C) The production of wheat by a farmer retained by himself for his self-consumption will be included in the national income of the country. True. The value of production for self-consumption (especially in the agriculture sector or imputed rent of owner-occupied houses) is an economic activity that generates value and is imputed and added to the National Income to provide an accurate estimate of the nation's total production.

(D) All capital goods are producer goods, but all producer goods are not necessarily capital goods. True.

• • Producer goods are all goods used in the production process (e.g., raw materials like coal/wood and fixed assets like machinery).

  • Capital goods are a sub-category of producer goods that are durable (fixed assets like machinery, plant) and can be used repeatedly in the production process.

  • Raw materials are single-use producer goods (intermediate goods) and are not capital goods.

  • Thus, all capital goods are producer goods, but not all producer goods (specifically intermediate goods) are capital goods.