National Income represents the total income of an entire nation generated by its economic activities.

Option 1 refers to Net Domestic Product which is Gross National Product minus depreciation. This is not a comprehensive measure of National Income as it does not consider indirect taxes, subsidies, or net factor income from abroad.

Option 2 adds net factor income from abroad to Option 1, which accounts for income made by domestic entities in foreign nations and foreign entities in the domestic nation, but it still does not account for indirect taxes and subsidies.

Option 4 subtracts net factor income from abroad from the Gross National Product at market prices. This causes an underestimation of the National Income by not considering income earned abroad by domestic entities.

Option 3 (correct answer) completely describes National Income. It considers the Gross National Product at market prices, depreciations, and adjusts for indirect taxes and subsidies. Hence, it provides a full measure of the income generated within an economy, taking into account all significant economic factors.