Question : Assertion: Net National Disposable Income (NNDI) represents the income available to the residents of a country for final consumption and savings.
Reason: Net National Disposable Income (NNDI) is obtained by subtracting net indirect taxes and depreciation from Gross National Disposable Income (GNDI).
Option 1: Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Option 2: Both Assertion and Reason are true, but the Reason is not the correct explanation of the Assertion.
Option 3: Assertion is true, but the Reason is false.
Option 4: Assertion is false, but the Reason is true.
Correct Answer: Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
Solution : The correct answer is (a) Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
The Assertion is true. Net National Disposable Income (NNDI) does represent the income available to the residents of a country for final consumption and savings. It reflects the income that individuals and households have at their disposal after deducting taxes, depreciation, and other transfers.
The Reason is also true and serves as the correct explanation for the Assertion. Net National Disposable Income (NNDI) is obtained by subtracting net indirect taxes and depreciation from Gross National Disposable Income (GNDI). Net indirect taxes represent the difference between indirect taxes and subsidies. By further subtracting depreciation, which accounts for the wear and tear of capital assets, from GNDI, NNDI is obtained. NNDI provides a measure of the income available to residents for final consumption and savings after accounting for taxes, transfers, and capital depreciation.
Therefore, Both Assertion and Reason are true, and the Reason is the correct explanation of the Assertion.
