Which of the following is/are correct with reference to the National ...
Explanation:
National Disposable Income refers to the total income earned by individuals and businesses within a country's borders, minus any taxes paid to the government and plus any transfers from the rest of the world. Let's analyze the given statements:
Statement 1: National Disposable Income gives an idea of what is the maximum amount of goods and services the domestic economy has at its disposal.
This statement is correct. National Disposable Income represents the total income available for consumption and investment within the domestic economy. It reflects the maximum amount of goods and services that can be purchased or utilized by the economy.
Statement 2: National Disposable Income includes transfers from the rest of the world such as aids and gifts.
This statement is also correct. National Disposable Income includes transfers from the rest of the world, such as foreign aid, gifts, grants, and remittances. These transfers contribute to the total income available within the domestic economy.
Therefore, both statements 1 and 2 are correct.
Conclusion:
The correct answer is option 'C' - Both 1 and 2. National Disposable Income provides an idea of the maximum amount of goods and services available to the domestic economy, and it includes transfers from the rest of the world.
Which of the following is/are correct with reference to the National ...
- Apart from the categories of aggregate macroeconomic variables such as National Income, Personal Income, Personal Disposable Income, another aggregate income categories used in National Income accounting is National Disposable Income.
- National Disposable Income = Net National Product at market prices + Net current transfers from the rest of the world.
- The significance of the National Disposable Income is that it gives an idea of what is the maximum amount of goods and services the domestic economy has at its disposal. Current transfers from the rest of the world include items such as gifts, aids, etc.
Hence both the statements are correct.