Question : Assertion: Net National Disposable Income (NNDI) represents the income available to the residents of a country for final consumption and savings.
Reason: Net National Disposable Income (NNDI) is obtained by subtracting net indirect taxes and depreciation from Gross National Disposable Income (GNDI).
Option 1: Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Option 2: Both Assertion and Reason are true, but the Reason is not the correct explanation of the Assertion.
Option 3: Assertion is true, but the Reason is false.
Option 4: Assertion is false, but the Reason is true.
Correct Answer: Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Solution : The correct answer is (a) Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
The Assertion is true. Net National Disposable Income (NNDI) does represent the income available to the residents of a country for final consumption and savings. It reflects the income that individuals and households have at their disposal after deducting taxes, depreciation, and other transfers.
The Reason is also true and serves as the correct explanation for the Assertion. Net National Disposable Income (NNDI) is obtained by subtracting net indirect taxes and depreciation from Gross National Disposable Income (GNDI). Net indirect taxes represent the difference between indirect taxes and subsidies. By further subtracting depreciation, which accounts for the wear and tear of capital assets, from GNDI, NNDI is obtained. NNDI provides a measure of the income available to residents for final consumption and savings after accounting for taxes, transfers, and capital depreciation.
Therefore, Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Question : Assertion: Gross National Disposable Income (GNDI) measures the total income available to the residents of a country for consumption and savings.
Reason: Gross National Disposable Income (GNDI) is calculated by subtracting net indirect taxes from Gross National Product (GNP).
Question : Assertion: Personal Disposable Income (PDI) represents the income available to individuals for consumption and savings after deducting personal income taxes.
Reason: Personal Disposable Income (PDI) is calculated by subtracting personal savings from personal income.
Question : Assertion: National income at factor cost is obtained by deducting net indirect taxes from national income.
Reason: Net indirect taxes represent the difference between indirect taxes and subsidies.
Question : Assertion: Disposable income is always greater than personal income.
Reason: Disposable income represents the amount of income available to individuals after paying personal income taxes.
Question : Assertion: The per capita income of a country is obtained by dividing the total national income by the population.
Reason: Per capita income represents the average income earned per person in a country.
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