Advertisements
Advertisements
Question
Given normal income, how can we find real income? Explain.
Solution
Real income can be calculated by applying the following formula:
Real Income = `"Nominal Income"/"Price Index of Current Year" xx "Price Index of Base Year" `
Consider Price Index of base year as 100
When nominal income is given, we can convert into real income with the of GDP deflator
Real income = `"Nominal Income"/"GDP deflator" xx 100`
APPEARS IN
RELATED QUESTIONS
Explain non-monetary exchanges as a limitation of using the gross domestic product as an index of the welfare of a country
“Income method” is also known as ______.
Explain the steps involved in calculating the National income by Income method.
Identify the correctly matched pair of items in Column A to those in Column B:
| Column A | Column B |
| 1. Income Tax | (a) Forced Transfer |
| 2. Services of Housewives | (b) Market Activities |
| 3. Retirement Pension | (c) Taxable for Firm |
| 4. Annual value of goods and services produced. | (d) Income method |
With a rise in real national income, welfare of the people ______
What is equilibrium income?
In an economy, C = 300 + 0.5Y and I = ? 600/- (where C =consumption, Y =income or investment). Compute the equilibrium level of income
In an economy, C = 300 + 0.5Y and I = ?. 600/- (where C = consumption, Y = income or investment). Computer the Consumption expenditure at equilibrium level of income
Suppose C = 40 + 0.8Y D. T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y. Find equilibrium income
Suppose C = 100 + 0.75Y D, I= 500, G = 750, taxes are 20 per cent of income, X = 150, M = 100 + 0.2Y. Calculate equilibrium income.
______ is the part of Profit.
If in an economy the value of Net Factor Income from Abroad is ₹200 crores and the value of Factor Income to Abroad is ₹40 crores. Identify the value of Factor Income from Abroad:
What is the other name for Income Method?
Read the following figure carefully and choose the correct pair from the alternatives given below:
Distinguish between Factor Cost and Market Price.
Find the odd word out:
Transfer payments:
Calculate National Income using Income method and Output method.
| PARTICULARS | (₹ crores) | |
| (i) | Value of output | 1200 |
| (ii) | Wages and salaries | 165 |
| (iii) | Rent | 60 |
| (iv) | Subsidies | 15 |
| (v) | Mixed Income of self employed | 180 |
| (vi) | Employer's contribution to social security | 15 |
| (vii) | Value of intermediate consumption | 600 |
| (viii) | Interest | 7 |
| (ix) | Factor income earned from abroad | 15 |
| (x) | Indirect taxes | 90 |
| (xi) | Profits | 23 |
| (xii) | Depreciation | 75 |
| (xiii) | Factor income paid abroad | 30 |
