| Which of the following methods of national income calculation are used in India for the primary sector? |
| 1. Expenditure method |
| 2. Output method |
| 3. Income method |
| Choose the correct one: |
A) Only 1
B) Only 2
C) Only 1 and 3
D) All 1, 2 and 3
Correct Answer: B
Solution :
[b] There are various methods for calculating the national income such as production method, income method, expenditure method etc. Production Method: The production method gives us national income or national product based on the final value of the produce and the origin of the produce in terms of the industry. All producing units are classified sector wise. 1. Primary sector is divided into agriculture, fisheries, animal husbandry. 2. Secondary sector consists of manufacturing. 3. Tertiary sector is divided into trade, transport, communication, banking, insurance etc. Income Method: Different factors of production are paid for their productive services rendered to an organization. The various incomes that includes in these methods are wages, income of self-employed, interest, profit, dividend, rents, and surplus of public sector and net flow of income from abroad. Expenditure Method: The various sectors - the household sector, the government sector, the business sector, either spend their income on consumer goods and services or they save a part of their income. These can be categorized as private consumption expenditure, private investment, public consumption, public investment etc.
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