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प्रश्न
Answer the following question:
State the precautions while using expenditure method to measure national income.
उत्तर
Precautions regarding calculation of national income by the expenditure method are:
i. National income estimation should include only the final goods and services. Intermediate consumption expenditure should not be included.
ii. Expenditure on the purchase of second hand goods should not be included in the national income estimation of the current accounting year. This is because it has already been included in the national income of the accounting year in which these goods were originally purchased.
iii. Expenditure on shares and bonds is not included. This is because these shares and bonds are mere financial assets and do not reflect any production activity of the goods or services.
iv. Imputed value of the goods and services produced for self consumption are included.
v. Expenditure on transfer payments by the government should not be included. This is because such payments are not related to any production activity in an economy.
vi. The value of subsidies should be included.
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संबंधित प्रश्न
National income
With the increase in income, both consumption and savings increase.
Total Cost and Total Revenue.
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 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
Find national income from the following:
Autonomous consumption = Rs100
Marginal propensity to consume = 0.80
Investment = Rs 50
Giving reason explain how should the following be treated in estimating national income:
i. Expenditure on fertilizers by a farmer.
ii. Purchase of tractor by a farmer.
National income is the sum of factor incomes accruing to : (Choose the correct alternative)
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents
Unforseen obsolescence of fixed capital assets during production is: (Choose the correct alternative)
a. Consumption of fixed capital
b. Capital loss
c. Income loss
d. None of the above
If real income is Rs 400 and price index is 105, calculate nominal income.
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.
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
Calculation National Income and Personal Disposable Income:
| (Rs crores) | ||
| 1 | Personal tax | 80 |
| 2 | Private final consumption expenditure | 600 |
| 3 | Undistributed profits | 30 |
| 4 | Private income | 650 |
| 5 | Government final consumption expenditure | 100 |
| 6 | Corporate tax | 50 |
| 7 | Net domestic fixed capital formation | 70 |
| 8 | Net indirect tax | 60 |
| 9 | Depreciation | 14 |
| 10 | Change in stocks | (-)10 |
| 11 | Net imports | 20 |
| 12 | Net factor income to abroad | 10 |
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 an individual to a bank
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 |
Calculate 'Net National Product at Market Price' and 'Personal Income'.
| (Rs crore) | ||
| (i) | Transfer payments by government | 7 |
| (ii) | Government final consumption expenditure | 50 |
| (iii) | Net imports | -10 |
| (iv) | Net domestic fixed capital formation | 60 |
| (v) | Private final consumption expenditure | 300 |
| (vi) | Private income | 280 |
| (vii) | Net factor income to abroad | -5 |
| (viii) | Closing stock | 8 |
| (ix) | Opening stock | 8 |
| (x) | Depreciation | 12 |
| (xi) | Corporate tax | 60 |
| Xii | Retained earnings of corporatio | 20 |
Calculate investment expenditure from the following data about an economy which is in equilibrium:
National income = 1500
Autonomous consumption expenditure = 300
Investment expenditure = 300
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.
Purchase of taxi by a taxi driver.
Investment made by the government is _____________ investment.(unplanned/gross/autonomous/induced)
Give reasons or explain the following
The propensity to save depends upon the level of income.
In an economy, S = −100 + 0.6 Y is the saving function, where S is Saving and Y is National Income. If investment expenditure is 1,100, calculate:
(1) Equilibrium level of National Income
(2) Consumption expenditure at equilibrium level of 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.
Write explanatory answer:
Explain the output method of measuring national income.
Fill in the blank using proper alternative given in the bracket:
National income is ........ concept.
Define or explain the following concept.
Disposable income.
State whether the following statement is true or false.
Investment made by the government is autonomous investment.
Define or explain the following concept.
Induced Consumption expenditure.
Explain the circular flow of national income.
State whether the following statements are TRUE or FALSE:
Saving increases with increase in 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.
Write explanatory notes.
Output method of measurement of national income.
Answer in brief.
Give different definitions of National Income.
State whether the following statements are True or False with reason:
Ten years period is considered for measuring 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.
State with reason whether you agree or disagree with the following statement:
The money value of intermediate goods is not included in the estimation of national income.
Answer in detail:
Explain the Output method of measuring National income.
Answer in detail:
Explain the 'Final Good Approach' to avoid double counting of goods and services in the estimation of national income.
Distinguish between:
Gross National Product and Net National Product
Distinguish between:
National income at market prices and national income at factor cost
Write short note on:
Circular flow of national income
Define or explain the following concept:
National income
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.
Give reason or explain the following statement:
Paid services are included in national income.
State whether the following statement is true or false.
Financial year in India is leap year.
State whether the following statement is true or false.
Services of housewives are included in national income.
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
GDP (FC) = GDP (MP) – __________
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.
Distinguish between the following.
Personal income and Disposable income
Answer the following question.
Define the problem of double counting in the computation of national income. State any two approaches to correct the problem of double counting.
Identify and explain the following concept:
Shobha collected data regarding the money value of all final goods and services produced in the country for the financial year 2018-2019.
Find the odd word
Concepts of national income -
Complete the following statement.
NNP is obtained by ______.
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)
Which is the largest figure?
Per capita income is obtained by dividing the National income by the ______.
GNP =______ + Net factor income from abroad.
When net factor income from abroad is deducted from NNP, the net value is______.
The value of NNP at production point is called______.
Trace the relationship between GNP and NNP.
Define GDP deflator.
Write a short note on per capita 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 ______.
Consider the following statements and identify the right ones.
- Personal income refers to the income of individuals of a country.
- The income at their disposal after paying direct taxes is called disposable income.
GNP at MP = ____________.
NNPMP =
Accounting of National Income at constant prices is known as ____________.
GDP MP = Rs.1000 and subsidies = Rs.50, then GDP FC will be ______.
Net National Income at Factor Cost is called?
Which of the following is correct?
If economic subsidies are added to and Indirect taxes are substracted from the national income at market prices, then it will be equal to ______.
The market value of all final goods and services produced in an economy over a year is called:
Total national income divided by total population is known as:
If factor cost is greater than marker price, it means that:
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.
Explain the meaning of national income.
