Match the national income aggregates and development indicators in List-I with their corre… — State PSC Exam

Match the national income aggregates and development indicators in List-I with their correct economic definitions and scope in List-II:

Net National Product at Factor Cost ( $NNP_{FC}$ )The traditional measure of national income calculated by deducting net indirect taxes (product taxes minus product subsidies) from Net National Product at market prices ( $NNP_{MP}$ ).
Real Gross Value Added at Basic Prices ( $Real\ GVA$ )Sectoral output measure adjusted for price changes using a deflator, which includes production taxes minus production subsidies but excludes net product taxes.
Inequality-adjusted Human Development Index ( $IHDI$ )Development metric reflecting the actual level of human development when the loss due to inequality across health, education, and income dimensions is discounted.
Genuine Progress Indicator ( $GPI$ )Economic indicator that adjusts personal consumption expenditure by incorporating environmental degradation, resource depletion, crime costs, and non-market volunteer work.

Answer

Net National Product at Factor Cost (

NNP_{FC}

) matches the traditional measure of national income calculated by deducting net indirect taxes from

NNP_{MP}

. Real Gross Value Added at Basic Prices matches sectoral output adjusted for price changes excluding net product taxes. Inequality-adjusted Human Development Index matches the metric discounting achievements based on inequality. Genuine Progress Indicator matches the green macroeconomic indicator factoring in environmental and social costs.

Net National Product at Factor Cost (

NNP_{FC}

) corresponds to national income after adjusting

NNP_{MP}

for net indirect taxes. Real GVA at Basic Prices measures sectoral output at constant prices including production taxes/subsidies but excluding product taxes. IHDI accounts for dimensional inequality discounting from standard HDI. GPI adjusts economic accounts for social and environmental externalities.

Step-by-Step Solution

Analyze national income accounting identities for Net National Product at Factor Cost

NNP_{FC} = NNP_{MP} - \text{Net Indirect Taxes}

(Product Taxes minus Product Subsidies), which defines national income.

Factor cost measures payments received by factors of production, excluding market price distortions caused by net indirect taxes.

Examine the definition of Real GVA at basic prices under NSO methodology

GVA at basic prices includes factor cost plus net production taxes, but excludes net product taxes, and 'Real' denotes constant price valuation.

Basic price distinguishes production-level taxes (like land revenue or stamp duty) from product-level taxes (like GST).

Evaluate international development indicators (IHDI and GPI)

IHDI discounts overall HDI achievements proportional to dimensional inequality, while GPI expands GDP by accounting for non-market work and deducting ecological/social costs.

Development indicators extend beyond standard economic growth statistics to capture equity and sustainability.

Key Concept

National Income Accounting Aggregates and Development Indicators

Estimated Time:2m 0s

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