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Question
State whether the following statements are True or False with reason:
Ten years period is considered for measuring National Income.
Solution
False, one year period is considered for measuring national income.
Explanation:
National income is the total market value (in monetary terms) of all final goods and services produced by the firms during an accounting year. Thus, only one year period is considered while measuring national income.
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National income
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Total Cost and Total Revenue.
Total Cost and Total Revenue.
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(a) Goods and Service tax
(b) Corporation tax
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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 |
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Giving reason explain how should the following be treated in the estimation of national income:
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| (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 |
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| 10 | Change in stocks | (-)10 |
| 11 | Net imports | 20 |
| 12 | Net factor income to abroad | 10 |
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| (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 a bank to an individual
Giving reason explain how the following should be treated in the estimation of national income:
Payment of interest by an individual to a bank
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| (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 |
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| (Rs crore) | ||
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| (ii) | Government final consumption expenditure | 50 |
| (iii) | Net imports | -10 |
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| (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 |
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| Xii | Retained earnings of corporatio | 20 |
Giving reasons explain how should the following be treated in the estimation of national income:
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| (Rs Arab) | ||
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| 3 | Net indirect tax | 80 |
| 4 | Private final consumption expenditure | 300 |
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| 3 | Net current transfers to abroad | 30 |
| 4 | Gross domestic fixed capital formation | 200 |
| 5 | Private final consumption expenditure | 500 |
| 6 | Net imports | 40 |
| 7 | Depreciation | 70 |
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Disposable income.
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Induced Consumption expenditure.
Fill in the blanks using proper alternatives given in the brackets
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National income is a flow concept.
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Explain the 'Final Good Approach' to avoid double counting of goods and services in the estimation of national income.
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Net national product and Net domestic product.
Distinguish between:
Gross National Product and Net National Product
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National income
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| 4) | National Income | d) | Personal income subsidy |
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| f) | GNP(MP) - Depreciation | ||
| g) | Output method | ||
| h) | Transfer income | ||
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Define GDP deflator.
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GDPFC = ____________.
NNPFC =
Accounting of National Income at constant prices is known as ____________.
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GNPMP =?
NNPMP =?
Net National Income at Factor Cost is called?
Which of the following is correct?
If factor cost is greater than marker price, it means that:
Give economic term:
The volume of commodities and services turned out during a given period counted without duplication.
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.
