Which of the following statement/statements are true?
Statement 1: Accounting of national income at constant prices is called real income.
Statement 2: National income is the monetary value of all final goods and services produced by the residents of a country.
Answer & explanation
Correct answer: option 1
The correct answer is option 1: Both the statements are true.
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Statement 1: Accounting of national income at constant prices is called real income.
- This is true because real income (real GDP) is measured at constant prices, meaning it is adjusted for inflation. This helps compare economic performance over different years without the effects of price changes.
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Statement 2: National income is the monetary value of all final goods and services produced by the residents of a country.
- This is true because national income refers to the total market value of all final goods and services produced by the residents of a country during a specific period, usually a year.