National Income Accounting Test - 4

The value of national income adjusted for inflation is called Real national income. This is adjusted for inflation which is calculated from a reference year which is also called as base year.

CSO which takes up the responsibility of estimating national income stands for Central Statistical Organisation. This organisation is responsible for co-ordination of statistical activities in India.  Its activities include national income accounting, conduct of annual survey of industries, economic censuses and its follow up surveys, compilation of index of industrial production, human development statistics, gender statistics etc.

Factor payments include Interest, Profits, Rent and also royalty

There are generally four factors of production labour, capital, land and entrepreneurship. Labour gets wages and salaries, capital gets interest, land gets rent and entrepreneurship gets profit as their remuneration.

Countries especially like India faces a great deal of unequal distribution of wealth. The main reasons for this include the people leaving behind an immense properties to their inherits, private property possession is another reason, difference in natural quality can be considered as one of the reasons. Gap between rich and poor and increased population are other causes for unequal distribution of wealth.

Among the given options lack of fertile land cannot be considered as the reason for income inequalities.

Per capita income or average income measures the average income earned per person in a given area (city, region, country, etc.) in a specified year. It is calculated by dividing the area's total income by its total population.

• National income is an uncertain term which is used interchangeably with national dividend, national output and national expenditure. On this basis, national income has been defined in a number of ways. In common parlance, national income means the total value of goods and services produced annually in a country.
• In other words, the total amount of income accruing to a country from economic activities in a year’s time is known as national income. It includes payments made to all resources in the form of wages, interest, rent and profits.

National income of a country is the total value of final output of all new goods and services produced in one year.