Question

What is real national income?

Options

• Real national income refers to national income at constant prices.

• Real National Income or Real GDP = Q × P*

• Both Real national income refers to national income at constant prices and Real National Income or Real GDP = Q × P*

• None of the above

Answer 1

Both Real national income refers to national income at constant prices and Real National Income or Real GDP = Q × P*

Explanation:

Real national income refers to national income at constant prices. lt is also called Real GDP. Real National Income or Real GDP = Q × P* where Q = quantity of final goods and services produced during an accounting year and P* = Price$ prevailing during the base year