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National income on current prices is higher than that at constant prices because
  • a)
    price increase is lower than increase in production
  • b)
    price increase is equal to increase in production
  • c)
    price increase is higher than increase in production
  • d)
    of decrease in production
  • e)
    None of these
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
National income on current prices is higher than that at constant pri...
National income on current prices is higher than that at constant prices because price increase is higher than increase in production. When the value of goods and services is found out by multiplying the quantity produced during one year by the prices prevailing in that year, we call it National Income at Current Prices. On the other hand, when the value of goods and services is calculated by multiplying the quantity during one year with prices of the base year, we call it National Income at Constant Prices.
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National income on current prices is higher than that at constant prices becausea)price increase is lower than increase in productionb)price increase is equal to increase in productionc)price increase is higher than increase in productiond)of decrease in productione)None of theseCorrect answer is option 'C'. Can you explain this answer?
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