Question

What is referred to as the total value of goods and services produced in a country during a year, adjusted for inflation?

• A. Per capita income
• B. National income
• C. Real national income
• D. Gross domestic product

Answer 1

The correct option is C Real national income

When we estimate a country's total income based on increased prices, the values or incomes are inflated. So, to estimate the real change in national income, we remove the effect of increased prices on income. Real national income also refers to the purchasing power of income.