1997 General Studies, all questions
UPSC Prelims 1997 · General Studies
Question 99: Economy and Social Development
National Income is the
aNet National Product at market price
bNet National Product at factor cost
cNet Domestic Product at market price
dNet Domestic Product at factor cost
AnswerThe answer is (b).
National Income is Net National Product at factor cost. Net national product is gross national product less depreciation. Factor cost leaves out indirect taxes and adds subsidies, so it measures what the factors of production earned. NNP at market price includes indirect taxes less subsidies, and the domestic measures leave out net factor income from abroad.
Why each option is right or wrong
- (a) NNP at market price includes indirect taxes net of subsidies, so it is not national income.
- (b) Right: NNP at factor cost.
- (c) NDP at market price is a domestic measure and also includes indirect taxes.
- (d) NDP at factor cost leaves out net factor income from abroad, so it is domestic income, not national income.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 1997, General Studies. UPSC's own paper isn't online; the words are from a published compilation. The paper on upsc.gov.in.