Net National Disposable Income includes:
Options
ANet Indirect Taxes
BSubsidies
CDirect Taxes
DTransfer Payments
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Determination of National IncomePYQ - Dec 2021 (Inter)Question 119 of 20
All Questions Correct Answer
✅ Option a — Net Indirect Taxes
All Options:
- ANet Indirect Taxes
- BSubsidies
- CDirect Taxes
- DTransfer Payments
Detailed Solution & Explanation
To determine the correct answer, let's break down the concept of Net National Disposable Income.
• Net National Disposable Income is the total income available to a nation for consumption and saving after accounting for all external transactions.
• It includes the income earned by a country's citizens, both within and outside the country, minus the income earned by foreigners within the country.
• The concept of Net National Disposable Income is closely related to the national income accounting framework, which considers various components of income, including taxes and subsidies.
The correct answer includes Net Indirect Taxes because these taxes are a part of the government's revenue, which is added to the national income to arrive at the Net National Disposable Income.
In contrast, options like Direct Taxes and Subsidies are not included because Direct Taxes are a deduction from personal income, and Subsidies are a transfer payment that does not add to the national income.
Transfer Payments, such as social security benefits, are also not included as they are not considered part of the national income.
About This Chapter: National Income
Paper
Paper 4: Business Economics
Weightage
15%
Key Topics
Aggregates, Measurement, Keynesian Theory
A crucial chapter covering national income aggregates like GDP, GNP, NDP, NNP, and the methods of measuring national income (Income, Expenditure, and Output methods). It also introduces Keynesian Theory including the concepts of Aggregate Demand, Consumption Function, and the Multiplier.
View Official ICAI SyllabusExam Strategy Tip
Practice numerical questions on GDP/GNP calculations and the Multiplier. These are guaranteed marks in every exam. Also understand the circular flow of income clearly.
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