Question

State with valid answer which of the following is true or false..
a) National income calculated by income method and by product method shows difference in resultant
b)Net factor for income from abroad is included in national income as it is a bilateral transfer
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Answer 1

Net factor for income from abroad is included in national income as it is a bilateral transfer

Net factor for income from abroad is included in national income as it is a bilateral transfer

so , option B is true

Answer 2

a)The given statement is false because national income calculated by both income and product method have the same answer but what differs is the method of calculation. In product method NNPfc(National income) is calculated at production levels and in income method NNPfc is calculated at distribution level.

b)The given statement is true because net factor income form abroad is included in national income as it is a bilateral transfer because NFIA(Net factor from abroad) consists of both Net factor income received from abroad and net factor income paid to abroad.

If you don't understand q/a (b) then learn what is a bilateral transfer.

HOPE it helps