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Question
Give reason or explain the following statement:
Old age pension is transfer income.
Solution
Old age pension is a transfer income as no services are provided in return for them. The government provides such services for welfare purposes.
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RELATED QUESTIONS
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.
Explain in detail ‘saving function’ with schedule and diagram.
C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate
(i) Equilibrium level of National Income.
(ii) Consumption expenditure at equilibrium level of national income.
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.
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 impact of rise in exchange rate on national income.
Explain the precautions that should be taken while estimating national income by expenditure method.
Calculate (a) National Income, and (b) Net National Disposable Income:
| (Rs In crores) | |
| (i) Compensation of employees | 2,000 |
| (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 |
| (xi) Net current transfers to aboard | 30 |
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:
Purchase of refrigerator by a firm for own use
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 |
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 an individual to a bank
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 |
Giving reasons explain how should the following be treated in the estimation of national income:
Purchase of uniforms for nurses by a hospital
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
How should the following be treated in estimating the national income of a country? You must give the reason for your answer
Expenditure on providing police services by the government
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
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 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.
Fill in the blank using proper alternative given in the bracket:
National income is ........ concept.
State whether the following statement is True or False
Total Revenue = Total quantity x Price.
State whether the following statement is true or false.
Investment made by the government is autonomous investment.
Fill in the blanks using proper alternatives given in the brackets
Personal Income - Direct Tax = ________________
(b) decreases
(c) becomes equal
(d) becomes zero
Explain the circular flow of national income.
Write Explanatory answer. (Any Two )
What is national income. Explain how national income is mesured by output method
State whether the following statements are TRUE or FALSE:
Saving increases with increase in income.
Distinguish between Illegal income and Transfer income.
Answer the following question:
What are the features of national income?
Answer the following question:
Explain the income method of measuring national income.
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.
Distinguish between:
Gross national product and Gross domestic product.
Distinguish between:
Net national product and Net domestic product.
Distinguish between:
Output method of measuring national income and Income method of measuring national income.
Distinguish between:
National income at market prices and national income at factor cost
Write short note on:
Circular flow of national income
Write short note on:
Personal disposable income
Define or explain the following concept:
Depreciation
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:
National income estimates are accurate in India.
Give reason or explain the following statement:
Paid services are included in national income.
State whether the following statement is true or false.
Inclusion of value of intermediate goods leads to double counting.
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.
State whether the following statement is true or false.
Services of housewives are included in national income.
Fill in the blank with appropriate alternatives given below
National income is the subject matter of _________ Economics.
Fill in the blank with appropriate alternatives given below
Paper purchased by a publisher is __________.
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.
Find the odd word
Concepts of national income -
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)
- Explain the concept of product (real flow) with the help of above diagram. (2m)
- Explain the concept of Money flow with the help of above diagram. (2m)
Net National product at factor cost is also known as
Per capita income is obtained by dividing the National income by the ______.
GNP =______ + Net factor income from abroad.
NNP stands for______.
Trace the relationship between GNP and NNP.
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?
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 = ____________.
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:
NNPMP =?
Net National Income at Factor Cost is called?
Which of the following is correct?
If for a country net factor income from abroad is negative then:
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:
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’?
