Question

State with reason whether you agree or disagree with the following statement:

There are many features of National Income.

Answer 1

I agree with this statement.

Reason:

Feature of national income are given below.

1. Macro Economic concept: National income represents income of the economy as a whole rather than that of an individual. Hence it is a macro economic concept.
2. Value of only final goods and services: In order to avoid double counting in national income, the value of only final goods and services produced in the economy are considered. The value of intermediate goods or raw materials is not considered. 
3. Net aggregate value: National income includes net value of goods and services produced and does not include depreciation cost. (i.e. wear and tear of capital assets)
4. Net income from abroad: National income includes net income from abroad i.e. difference between export value and import value (X-M) and net difference between receipts from abroad and payments made abroad (R-P).
5. Financial year: National income is always expressed with reference to a time period. In India, it is from 1st April to 31st March.
6. Flow concept: National income is a flow concept as it shows flow of goods and services produced in the economy during a year.
7. Money value: National income is always expressed in monetary terms. It represents only those goods and services which are exchanged for money.