Which of the following is TRUE regarding the relationship between the three methods of measuring national income?

medium Q6 of 15

Economic Awareness - Sectors of Indian Economy

AIncome Method always gives a higher value than Product Method

BAll three methods should theoretically give the same national income figure

CExpenditure Method excludes government spending

DProduct Method includes transfer payments

Step-by-Step Solution

Step 1: Understand theoretical equivalence
In national income accounting, the Product, Income, and Expenditure methods should theoretically yield the same national income figure.
Step 2: Analyze options
All three methods should theoretically give the same national income figure is true. Income Method does not always give higher values than Product Method. Expenditure Method includes government spending. Product Method excludes transfer payments.
Final Answer:
All three methods should theoretically give the same national income figure → Option B
Quick Check:
National income methods = theoretically equal values ✅

Quick Trick: Remember all methods measure the same total national income.

Common Mistakes:

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