In national income accounting, national income is traditionally measured as
Correct answer: A. Net national product at factor cost
- A. Net national product at factor cost
- B. Gross domestic product at market prices
- C. Net domestic product at market prices
- D. Gross national product at factor cost
Explanation
National income is conventionally defined as net national product at factor cost. It excludes depreciation and adjusts national production for net factor income, while factor cost excludes indirect taxes and includes subsidies.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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