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Q99 (IAS/1997) Economy › Basic Concepts & National Income › National income aggregates Answer Verified

National Income is the

Result
Your answer: —  ·  Correct: B
Explanation

National Income is defined as Net National Product at factor cost (NNPfc): it equals the total factor incomes (wages, profits, rent, interest, etc.) earned by a country’s residents during a year, i.e., NNP at factor cost is called National Income [1]. In accounting terms, NNP at factor cost is obtained by adjusting NNP at market prices for net indirect taxes (indirect taxes minus subsidies); thus NNPfc (National Income) = NNP at market prices – (Indirect taxes – Subsidies) (equivalently, NNPMP minus net indirect taxes) [2]. Therefore the correct choice is “Net National Product at factor cost.”

Sources

  1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 2: National Income Accounting > National Disposable Income and Private Income > p. 28
  2. [2] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 2: National Income Accounting > NNP ≡ GNP – Depreciation > p. 25
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