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A very high rise in National Income at current market prices and a low rise at constant prices reveals
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- the high rate of growth in the economy at the current period
- the increased production in the current period
- the improper growth of the economy
- the high rate of inflation prevailing in the economy
- the high rate of growth in the economy at the current period
Correct Option: D
When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is multiplied by the base price if called national income at constant price. But what is seen is that prices of commodities go on changing. When the current outputs are multiplied by the current prices it will give rise to monetary national income. So a very rise in National Income at current or constant prices does not indicate increase in product or output, but is rather due to the rise in price level.
