Arrange the following in order as per Income method of measuring national Income.
(A) Classifying the production units into primary, secondary and tertiary sector on the basis of their occupational activities
(B) Adding the net factor income from abroad.
(C) Determination of domestic income.
(D) Finding the factor payments made by each production unit and classifying it into compensation of employees, operating surplus and mixed income.
Choose the correct answer from the options given below:
Arrange the following in order as per Income method of measuring national Income.
(A) Classifying the production units into primary, secondary and tertiary sector on the basis of their occupational activities
(B) Adding the net factor income from abroad.
(C) Determination of domestic income.
(D) Finding the factor payments made by each production unit and classifying it into compensation of employees, operating surplus and mixed income.
Choose the correct answer from the options given below:
Solution
Option 1: (A), (D), (C), (B) -> The Income method of measuring national income follows a systematic sequence: First, classify production units into primary, secondary, and tertiary sectors based on their activities (A). Second, identify and calculate factor payments (wages, rent, interest, profit) made by each unit and classify them as compensation of employees, operating surplus, and mixed income (D). Third, sum all these factor incomes to determine domestic income (C). Finally, add net factor income from abroad to domestic income to arrive at national income (B). This logical flow ensures accurate measurement of national income through the income approach. -> correct
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