Question

Arrange the following steps of estimation of National Income by income method in the proper sequence: (A) Identification and classification of producing firms.
(B) Estimation of NDP\textsubscript{FC}.
(C) Estimation of NNP\textsubscript{FC}.
(D) Classification of factor income.

• A. (A), (B), (C), (D)
• B. (A), (C), (B), (D)
• C. (A), (D), (B), (C)
• D. (A), (B), (D), (C)

Hint:

Income method: Identify firms → classify factor incomes → calculate NDP\textsubscriptFC → adjust for NFIA to get NNP\textsubscriptFC.

Answer 1

The Correct Option is C

Step 1: Recall the income method steps.
1. Identify and classify producing units → ensures which firms contribute to national income.
2. Classify factor incomes → wages, rent, interest, profit.
3. Estimate Net Domestic Product at Factor Cost (NDP\textsubscript{FC}).
4. Add Net Factor Income from Abroad to obtain Net National Product at Factor Cost (NNP\textsubscript{FC}).
Step 2: Apply to the sequence.
(A) First step → Identify firms.
(D) Second step → Classify factor incomes.
(B) Third step → Estimate NDP\textsubscript{FC}.
(C) Last step → Estimate NNP\textsubscript{FC}.
Final Answer: \[ \boxed{(A), (D), (B), (C)} \]