The idea behind National Disposable Income is that it shows:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → the maximum amount of goods and services the domestic economy has at its disposal
National Disposable Income adds current transfers from abroad, such as gifts and aid, to NNP at market prices. It shows the maximum amount of goods and services the domestic economy has at its disposal.
Option (1) the value of output received by the factors of production belonging to a country — Incorrect. Output received by the factors belonging to a country describes GNP at factor cost.
Option (2) how much the country has to spend just to maintain its current GDP — Incorrect. What the country must spend to maintain its GDP is shown by NDP.
Option (3) the maximum amount of goods and services the domestic economy has at its disposal — Correct. This is the book’s own idea of National Disposable Income.
Option (4) the income over which the households have complete say — Incorrect. The income over which households have full say is personal disposable income.
NCERT (2026-27): “National Disposable Income and Private Income The idea behind National Disposable Income is that it gives an idea of what is the maximum amount of goods and services the domestic economy has at its disposal. Current transfers from the rest of the world include items such as gifts, aids, etc.” |