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: Income Method Steps Recall.
1. Identify and classify producing units to determine firms contributing to national income.
2. Classify factor incomes into wages, rent, interest, and profit.
3. Estimate Net Domestic Product at Factor Cost (NDP\textsubscript{FC}).
4. Add Net Factor Income from Abroad to derive Net National Product at Factor Cost (NNP\textsubscript{FC}).
Step 2: Application to Sequence.
(A) First step: Identify firms.
(D) Second step: Classify factor incomes.
(B) Third step: Estimate NDP\textsubscript{FC}.
(C) Final step: Estimate NNP\textsubscript{FC}.
Final Answer: \[\boxed{(A), (D), (B), (C)}\]