The national income consists of a collection of goods and services red...
National income is measured by the output method by calculating the total value of goods and services produced in the country during the year. The money value of goods and services produced in an economy in an accounting year is called Gross National Product (GNP). It is defined by J. R. Hicks as “the collection of goods and services reduced to a common basis by being measured in terms of money.”
The national income consists of a collection of goods and services red...
According to the given statement, "The national income consists of a collection of goods and services reduced to a common basis by being measured in terms of money," the person who said this is "C) Hicks."
Below is a detailed explanation of this answer:
Introduction:
The concept of national income refers to the total value of all goods and services produced within a country during a specific time period, usually a year. It provides an important measure of a country's economic performance and helps in analyzing its economic growth and development.
Explanation:
1. Sir John Richard Hicks:
Sir John Richard Hicks was a British economist who made significant contributions to the field of economics, particularly in the areas of welfare economics, microeconomics, and macroeconomics. He developed several economic theories and models that have had a lasting impact on the field.
2. National Income:
National income is the total value of goods and services produced by the residents of a country in a given time period. It includes all economic activities that generate income, such as manufacturing, agriculture, services, and trade. National income is an important indicator of a country's economic health and is used to measure and compare the economic performance of different countries.
3. Measuring National Income:
To measure national income accurately, it is necessary to reduce the diverse range of goods and services produced into a common unit of measurement. This is achieved by measuring them in terms of money. By assigning a monetary value to each good and service produced, it becomes possible to add them up and calculate the total national income. Money serves as a common denominator that allows for the aggregation and comparison of different economic activities.
Conclusion:
In conclusion, the statement that "The national income consists of a collection of goods and services reduced to a common basis by being measured in terms of money" was made by Sir John Richard Hicks, a renowned economist. This understanding is crucial in accurately measuring and analyzing a country's national income and its economic performance.