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Question
Unpaid services are not included in national income.
Solution
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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.
In order to avoid double counting, value added approach is used.
Explain various types of investment expenditure.
Find national income and private income:
(Rs crore)
(i) Wages and salaries 1,000
(ii) Net current transfer to abroad 20
(iii) Net factor income paid to abroad 10
(iv) Profit 400
(v) National debt interest 120
(vi) Social security contributions by employers 100
(vii) Current transfers from government 60
(viii) National income accruing to government 150
(ix) Rent 200
(x) Interest 300
(xi) Royalty 50
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.
National income is the sum of factor incomes accruing to : (Choose the correct alternative)
(a) Nationals
(b) Economic territory
(c) Residents
(d) Both residents and non-residents
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
Explain the impact of rise in exchange rate on national income.
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 |
Giving reason explain how the following should be treated in the estimation of national income:
Payment of interest by a firm to a bank
Giving reason explain how the following should be treated in the estimation of national income:
Payment of interest by a bank to an individual
Calculate the 'National Income' and 'Private Income' :
| (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 |
| 12 | Dividends | 50 |
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 |
Calculate investment expenditure from the following data about an economy which is in equilibrium:
National income = 1500
Autonomous consumption expenditure = 300
Investment expenditure = 300
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
Calculate 'National Income' and 'Net National Disposable Income' from the following
| (Rs in Arab) | ||
| 1 | Net change in stock | 50 |
| 2 | Government final consumption expenditure | 100 |
| 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 |
| 8 | Net factor income to abroad | (-)10 |
| 9 | Net indirect tax | 120 |
| 10 | Net capital transfers to abroad | 25 |
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
Explain national income determination through the two alternative approaches. Use Diagram.
How should the following be treated while estimating national income? You must give the reason in support of your answer.
Bonus paid to employees
How should the following be treated while estimating national income? You must give the reason in support of your answer.
Addition to stocks during a year
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)
In an economy, S = −100 + 0.6 Y is the saving function, where S is Saving and Y is National Income. If investment expenditure is 1,100, calculate:
(1) Equilibrium level of National Income
(2) Consumption expenditure at equilibrium level of 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.
Define or explain the following concept.
Disposable income.
State whether the following statement is true or false.
Investment made by the government is autonomous investment.
Define or explain the following concept.
Induced Consumption expenditure.
Explain the circular flow of national income.
Define of Explain the following concept.
Net earnings from foreign trade
Write explanatory notes.
Output method of measurement of national income.
Give reasons or explain the following statements:
The net national income is less than gross national income.
Answer the following question:
What are the features of national income?
Answer the following question:
Explain the concept of Gross domestic product at market prices.
Answer the following question:
Explain the income method of measuring national income.
State with reason whether you agree or disagree with the following statement:
Many precautions are to be taken while estimating national income by income method.
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 'Final Good Approach' to avoid double counting of goods and services in the estimation of national income.
Distinguish between:
Gross national product and Gross 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:
Expenditure method of measuring national income.
Write short note on:
Circular flow of national income
Write short note on:
Net national product at factor cost
Define or explain the following concept:
Final goods
Define or explain the following concept:
National income
Define or explain the following concept:
Personal 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:
Old age pension is transfer income.
Give reason or explain the following statement:
Paid services are included in national income.
State whether the following statement is true or false.
Financial year in India is leap year.
Match the following groups:
| Group A | Group B | ||
| 1) | Income method | a) | Personal income – direct taxes |
| 2) | Unemployment allowance | b) | Money value of goods and services |
| 3) | Disposable Income | c) | Factor cost method |
| 4) | National Income | d) | Personal income subsidy |
| 5) | NNP(MP) | e) | Transfer payment |
| f) | GNP(MP) - Depreciation | ||
| g) | Output method | ||
| h) | Transfer 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
National income is __________ concept.
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.
Define the following:
Income from property and entrepreneurship
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)
PASSAGE
Corona has slowed down the economy Lockdown imposed to contain the spread of Corona virus had resulted in closure of manufacturing and business activities. During this financial year, the economy is expected to move towards a contractionary phase rather than expansionary phase. This has been stated in the budget. This is the first paperless budget in the history of India. At the same time, it is the third post-independence budget to be presented at a time when the economy is shrinking. The budget shows a fiscal deficit of more than 5%.
The Union Finance Minister has presented a budget that seeks to accelerate the economy by balancing the impact of Corona on the economy on one hand and growing expectations of all sectors on the other. A significant increase in the allocation for Healthcare by 137% is a feature of this budget. In this budget, the expected revenue for the year 212-2022 is Rs. 34,35, 000crore and the expected expenditure is Rs. 35,83, 000 crore.
Attempts have been made to boost infrastructure, education, agricultural production, employment generation and industry, but the Income tax status quo has remained the same. The budget provides Rs.16.5 lakh crore for agricultural credit, Rs. 223,000 crore for health facilities, Rs. 3 lakh crore for Power Distribution Scheme, Rs. 15,700 crore for Small and Medium Enterprises and Rs. 20,000 crore for Government Bank Capital.
- What is the percentage increase in the provision for Healthcare? (1 mark)
- Mention the sectors that have been promoted in this budget. (1 mark)
- Express your personal opinion based on the above information regarding the budget ( 2 marks)
Net National product at factor cost is also known as
Which is the largest figure?
Per capita income is obtained by dividing the National income by the ______.
GNP =______ + Net factor income from abroad.
NNP stands for______.
The value of NNP at production point is called______.
The average income of the country is______.
Write the formula for calculating GNP.
What is the difference between NNP and NDP?
Define GDP deflator.
Explain briefly NNP at factor cost.
Explain the meaning of non-market activities.
Nominal GNP is same as ____________.
Real GNP is same as ______.
NNPMP =
NNPFC =
Accounting of National Income at constant prices is known as ____________.
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:
GNPMP =?
NNPMP =?
Which of the following is correct?
Total national income divided by total population is known as:
Which of the following is not a component of domestic income?
If factor cost is greater than marker price, it means that:
Identify and explain the following concept.
Shobha collected data regarding the money value of all final goods and services produced in the country for the financial year 2019-20.
How should the following be treated in estimating National Income of a Country? Give valid reasons.
Profit earned by Foreign Banks in India.
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.
