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प्रश्न
Answer the following question:
Explain the income method of measuring national income.
उत्तर
According to the income method, national income is estimated by aggregating all the factor incomes (in the form of wages, rent, interest and profits) paid to the owners of these factors of production (land, labour, capital and enterprise) within the domestic territory in an accounting year.
That is,
NNPFC or National Income (NI) = Compensation of employees (COE) + Operating surplus + Mixed income +Net Factor Income from Abroad (NFIA)
Where:
Compensation of Employees (COE) includes
a. Wages and salaries paid in cash.
b. Compensation paid in kind
c. Employer's contribution to the social security schemes such as pension fund, provident fund etc.
Operating surplus includes rent, interest, royalty and profit.
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संबंधित प्रश्न
With the increase in income, both consumption and savings increase.
Distinguish between Gross National Product and Net National Product.
Explain the various methods of measuring national income.
In order to avoid double counting, value added approach is used.
Unpaid services are not included in national income.
Explain various types of investment expenditure.
Explain in detail ‘saving function’ with schedule and diagram.
Find national income and private income:
(Rs crore)
(i) Wages and salaries 1,000
(ii) Net current transfer to abroad 20
(iii) Net factor income paid to abroad 10
(iv) Profit 400
(v) National debt interest 120
(vi) Social security contributions by employers 100
(vii) Current transfers from government 60
(viii) National income accruing to government 150
(ix) Rent 200
(x) Interest 300
(xi) Royalty 50
Calculate National Income from the following data:
| S.No. | Particulars | Rs.in crores |
| (i) | Private final consumption expenditure | 900 |
| (ii) | Profit | 100 |
| (iii) | Government final consumption expenditure | 400 |
| (iv) | Net indirect taxes | 100 |
| (v) | Gross domestic capital formation | 250 |
| (vi) | Change in stock | 50 |
| (vii) | Net factor income from abroad | (-)40 |
| (viii) | Consumption of fixed capital | 20 |
| (ix) | Net imports | 30 |
Find national income from the following:
Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50
Which of the following affects national income? (Choose the correct alternative)
(a) Goods and Service tax
(b) Corporation tax
(c) Subsidies
(d) None of the above
Explain the precautions that should be taken while estimating national income by expenditure method.
Calculate the (a) Net National product as markets price. and (b) Gross National Disposable Income:
| (Rs In crores) | |
| (i) Mixed income of self – employed | 8,000 |
| (ii) Rent | 400 |
| (iii) Profit | 900 |
| (iv) Dividend | 100 |
| (v) Interest | 500 |
| (vi) Mixed income of self- employed | 7,000 |
| (vii) Net factor income to abroad | 50 |
| (viii) Net export | 60 |
| (ix) Net indirect taxes | 300 |
| (x) Depreciation | 150 |
A government of India has recently launched 'Jan-Dhan Yojana' aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect the national income of the country.
Giving reason explain how should the following be treated in the estimation of national income:
Expenditure by a firm on payment of fees to a chartered accountant
Giving reason explain how should the following be treated in the estimation of national income:
Payment of corporate tax by a firm
Calculation National Income and Personal Disposable Income:
| (Rs crores) | ||
| 1 | Rent | 100 |
| 2 | Net current transfers to rest of the world | 30 |
| 3 | Social security contributions by employers | 47 |
| 4 | Mixed income | 600 |
| 5 | Gross domestic capital formation | 140 |
| 6 | Royalty | 20 |
| 7 | Interest | 110 |
| 8 | Compensation of employees | 500 |
| 9 | Net domestic capital formation | 120 |
| 10 | Net factor income from abroad | (-)10 |
| 11 | Net indirect tax | 150 |
| 12 | Profit | 200 |
Giving reason explain how the following should be treated in the estimation of national income:
Payment of interest by a firm to a bank
Giving reason explain how the following should be treated in the estimation of national income:
Payment of interest by a bank to an individual
Calculate the 'National Income' and 'Private Income' :
| (Rs in crores) | ||
| 1 | Rent | 200 |
| 2 | Net factor income to abroad | 10 |
| 3 | National debt interest | 15 |
| 4 | Wages and salaries | 700 |
| 5 | Current transfers from government | 10 |
| 6 | Undistributed profit | 20 |
| 7 | Corporation tax | 30 |
| 8 | Interest | 150 |
| 9 | Social security contributions by employers | 100 |
| 10 | Net domestic product accruing to government | 250 |
| 11 | Net current transfers to rest of the world | 5 |
| 12 | Dividends | 50 |
Giving reasons explain how should the following be treated in the estimation of national income:
Purchase of machinery by a factory for own use
Giving reasons explain how should the following be treated in the estimation of national income:
Purchase of uniforms for nurses by a hospital
Calculate investment expenditure from the following data about an economy which is in equilibrium:
National income = 1500
Autonomous consumption expenditure = 300
Investment expenditure = 300
How should the following be treated in estimating the national income of a country? You must give a reason for your answer.
Taking care of aged parents
Calculate 'Marginal Propensity to Consume' from the following data about an economy which is in equilibrium:
National income = 800
Autonomous consumption expenditure = 100
Investment expenditure = 100
Explain national income determination through the two alternative approaches. Use Diagram.
How should the following be treated while estimating national income? You must give the reason in support of your answer.
Bonus paid to employees
How should the following be treated while estimating national income? You must give the reason in support of your answer.
Addition to stocks during a year
Investment made by the government is _____________ investment.(unplanned/gross/autonomous/induced)
Give reasons or Explain the following statements
Services of housewives are excluded from national income.
C = 50 + 0.5 Y is the Consumption Function where C is consumption expenditure and Y is National Income and Investment expenditure is 2000 is an economy. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of national income.
Distinguish between the following :
Output method and Income method of measuring national income.
Write explanatory answer:
Explain the output method of measuring national income.
Distinguish between.
Personal income and National Income.
Define or explain the following concept.
Induced Consumption expenditure.
Explain the circular flow of national income.
Define of Explain the following concept.
Net earnings from foreign trade
State whether the following statements are TRUE or FALSE with reason.
National income is a flow concept.
Give reasons or explain the following statement:
The concept of national income has an important place in economic development.
Answer in brief.
Give different definitions of National Income.
Answer the following question:
What is double counting of national income?
Answer the following question:
What are the features of national income?
State with reason whether you agree or disagree with the following statement:
Many precautions are to be taken while estimating national income by income method.
Answer in detail:
Explain the Output method of measuring National income.
Distinguish between:
Gross national product and Gross domestic product.
Write short note on:
Expenditure method of measuring national income.
Write short note on:
Personal disposable income
Write short note on:
Net national product at factor cost
Define or explain the following concept:
Final goods
Define or explain the following concept:
Personal income
Give reason or explain the following statement:
Income from second hand sale of goods is excluded from national income.
Give reason or explain the following statement:
Old age pension is transfer income.
State whether the following statement is true or false.
GDP includes net income from abroad.
State whether the following statement is true or false.
Financial year in India is leap year.
Match the following groups:
| Group A | Group B | ||
| 1) | Income method | a) | Personal income – direct taxes |
| 2) | Unemployment allowance | b) | Money value of goods and services |
| 3) | Disposable Income | c) | Factor cost method |
| 4) | National Income | d) | Personal income subsidy |
| 5) | NNP(MP) | e) | Transfer payment |
| f) | GNP(MP) - Depreciation | ||
| g) | Output method | ||
| h) | Transfer income | ||
Fill in the blank with appropriate alternatives given below
In India, the responsibility for the calculation of national income rests with _________.
Fill in the blank with appropriate alternatives given below
National income is __________ concept.
Fill in the blank with appropriate alternatives given below
Paper purchased by a publisher is __________.
Distinguish between the following.
Personal income and Disposable income
Define the following:
Income from property and entrepreneurship
Assertion and Reasoning type question.
Assertion (A): In national income, value of only final goods and services produced in the economy are considered.
Reasoning (R): National income is always expressed in monetary terms.
Study the following table, figure, passage and answer the question given below it.
| Components of GNP for the year 2018 |
In crores |
| Consumption | 200 |
| Investment | 300 |
| Govt.Expenditure | 400 |
| Net export | - 100 |
| Net receipts | - 50 |
| Depreciation | 100 |
A. Complete the formula
GNP = C + `square` + G + (X - M) + `square` (1m)
B. Calculate Gross National Product & Net National Product from the above data. (3m)
Net National product at factor cost is also known as
Which is the largest figure?
Per capita income is obtained by dividing the National income by the ______.
GNP =______ + Net factor income from abroad.
NNP stands for______.
When net factor income from abroad is deducted from NNP, the net value is______.
The value of NNP at production point is called______.
The average income of the country is______.
Define GDP deflator.
Differentiate between personal and disposable income.
Explain briefly NNP at factor cost.
What is the solution to the problem of double counting in the estimation of national income?
Explain the meaning of non-market activities.
Nominal GNP is same as ____________.
Real GNP is same as ______.
NNPFC =
GDP MP = Rs.1000 and subsidies = Rs.50, then GDP FC will be ______.
The market price of all final goods of a country in a year is known as:
Which one is true?
GNPMP =?
NNPMP =?
Net National Income at Factor Cost is called?
Total national income divided by total population is known as:
Which of the following is not a component of domestic income?
How should the following be treated in estimating National Income of a Country? Give valid reasons.
Profit earned by Foreign Banks in India.
How should the following be treated in estimating National Income of a Country? Give valid reasons.
Expenditure on upgradation of fixed asset by a firm.
What is ‘National Income’?
Explain the meaning of national income.
