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Question
Give reason or Explain the following statement :
Paid services are included in national income.
Solution
Paid services are included in national income.
Paid services are included in national income. It is because national income includes value of only those services which are paid for e.g. services of Doctor, lawyers, mobile service, railway service etc. It does not includes services which are not paid for and provided out of love, affection, charity, sympathy etc.
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National income
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Explain various types of investment expenditure.
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
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(ii) Consumption expenditure at equilibrium level of national income.
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 |
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Autonomous consumption = Rs100
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Investment = Rs 50
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ii. Purchase of tractor by a farmer.
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(b) Economic territory
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(d) Both residents and non-residents
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a. Consumption of fixed capital
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| (Rs In crores) | |
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| (ii) Rent | 400 |
| (iii) Profit | 900 |
| (iv) Dividend | 100 |
| (v) Interest | 500 |
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| (vii) Net factor income to abroad | 50 |
| (viii) Net export | 60 |
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| (xi) Net current transfers to aboard | 30 |
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| (Rs In crores) | |
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| (iii) Profit | 900 |
| (iv) Dividend | 100 |
| (v) Interest | 500 |
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| (viii) Net export | 60 |
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| (Rs in crores) | ||
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| 6 | Undistributed profit | 20 |
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| 11 | Net current transfers to rest of the world | 5 |
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| (Rs crore) | ||
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National income
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| Group A | Group B | ||
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| 2) | Unemployment allowance | b) | Money value of goods and services |
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| g) | Output method | ||
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