While computing national income estimates, which of the following is required to be observed ? Options: A . &nbspThe value of exports to be subtracted and the value of imports to be added B . &nbspThe value of exports to be added and the value of imports to be subtracted C . &nbspThe value of both exports and imports to be added D . &nbspThe value of both exports and imports to be subtracted

While computing national income estimates, which of the following is required to

Question

While computing national income estimates, which of the following is required to be observed ?

Options:

A . The value of exports to be subtracted and the value of imports to be added

B . The value of exports to be added and the value of imports to be subtracted

C . The value of both exports and imports to be added

D . The value of both exports and imports to be subtracted

Answer: Option B
Answer: (b)
National income is also computed by the expenditure approach wherein the focus is on finding the total output of a nation by finding the total amount of money spent.
As per this approach,
GDP = C+I+G+ (X-M)
where, C = household consumption expenditures / personal consumption expenditures;
I = gross private domestic investment;
G = government consumption and gross investment expenditures;
X = gross exports of goods and services; and
M = gross imports of goods and services.
(X - M) is often written as XN, which stands for "net exports".

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