Which of the following is included in calculating national income at market prices?
A) Illegal income, such as income earned from smuggling.
B) The market value of intermediate goods.
C) Non-monetary payments for goods and services.
D) Subsidies and taxes.

Question

Quizplus · Accepted Answer

National income at market prices includes subsidies and taxes because these elements adjust the factor cost to align with the market prices of goods and services. Illegal income and the market value of intermediate goods are excluded to avoid double counting and because illegal activities are not officially recorded. Non-monetary payments are also typically excluded from these calculations as they do not have a direct market price.

Which of the Following Is Included in Calculating National Income