BPSC CCE Prelims
National Income & Economic Development Previous Year Questions (PYQs)

Detailed Explanation:

NNP at Factor Cost is calculated by removing depreciation and net indirect taxes from GNP at Market Price.

NNP_FC = GNP_MP - Depreciation - Net Indirect Taxes, which represents the actual income earned by factors of production (land, labour, capital, entrepreneurship) and is called National Income.

✅ Option 4 – Correct: NNP at Factor Cost = National Income by definition in national income accounting.

Detailed Explanation:

Per capita real income accounts for both population growth and inflation, reflecting the actual purchasing power and living standards of individuals year-on-year.

National income at current prices ignores inflation; savings ratio and balance of payments are partial indicators that do not capture overall welfare or equitable distribution of growth.

Therefore, growth in per capita real income from year to year is the best index of economic development, making Option 2 the correct answer.