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Question
Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 71,000 |
| (ii) | Gross Domestic Capital Formation | 10,000 |
| (iii) | Government Final Consumption Expenditure | ? |
| (iv) | Mixed Income of Self Employed | ? |
| (v) | Net Factor Income from Abroad | 1,000 |
| (vi) | Net Indirect Taxes | 2,000 |
| (vii) | Profits | 1,200 |
| (viii) | Wages & Salaries | 15,000 |
| (ix) | Net Exports | 5,000 |
| (x) | Private Final Consumption Expenditure | 40,000 |
| (xi) | Consumption of Fixed Capital | 3,000 |
| (xii) | Operating Surplus | 30,000 |
Solution
National Income (NNPFC) = 71,000
We know,
NNPFC = GDPMP - Consumption of Fixed Capital - NIT + NFIA
71,000 = GDPMP - 3,000 - 2,000 + 1,000
GDPMP = 75,000
Now, we know as per the expenditure method:
GDPMP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation + Net Exports
75,000 = 40,000 + G + 10,000 + 5,000
G = 20,000
So, Government Expenditure is equal to ₹ 20,000
Now, NNPFC = NDPFC + NFIA
71,000 = NDPFC + 1,000
NDPFC = 70,000
Also,
NDPFC = Compensation of Employees + Operating Surplus + Mixed Income
70,000 = 15,000 + 30,000 + Mixed Income
Mixed Income = 25,000
So, Mixed-Income is equal to ₹ 25,000.
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