National Income and Related Aggregates Test - 17

Final goods refer to those goods which are used either for consumption or for investment. Final goods have crossed the boundary of production and are ready for use by their final users. These goods are included in the estimation of national product or national income. Example: Bread and butter used by the consumers.

In this model households depend on firms for products and firms depend on households for factor services. Government depends on firms to get tax revenue and firms depend on government for the purchase of their goods. Households depend on government for salaries and wages and government depends on households for factor services. 

Factor income earned by non residents in one's country is exclusive of national income. So, we add net factor income of our residents working abroad.

Following are the components of net factor income from abroad:

• Net compensation of employees.
• Net income from income and entrepreneurship.
• Net retained earnings.

In economics, stock is measured at one point of time and represent the amount of good exists at that point of time on it and hence, wealth is a stock concept.

National income is the value of goods and services produced in an economy over a given year. The national income is thus, estimated 'over a period of time' and not 'at a point in time' which makes it a flow concept. 

Personal income refers to the income of the individuals of a country. While transfer payments are added, the other three are subtracted.

Money flow is the flow of factor payments.

Factor payments are the payments made to the factors of production, which include land, labor, capital, and entrepreneurship. These factors contribute to the production of goods and services in an economy. Money flow refers to the movement of money as it is used to compensate these factors of production.

Domestic Income of a country can be more than its National Income- it is a true statement. This situation occurs when net factor income from abroad is negative. Hence, NDP(at factor cost) or Domestic income becomes greater than the NNP(at factor cost) or National Income.

The national income estimation is the responsibility of CSO.

During the post-independence period, the estimate of national income was primarily conducted by the National Income Committee. Later on, it was carried over by the Central Statistical Organization.