# National Income and Related Aggregates (CBSE (Central Board of Secondary Education- Board Exam) Class-12 Economics): Questions 39 - 43 of 68

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## Question number: 39

» National Income and Related Aggregates » Circular Flow of National Income

Essay Question▾

### Describe in Detail

Explain equilibrium level of national income using Savings and Investment approach. Draw diagram in support of your explanation.

### Explanation

In this figure equilibrium level of national income with reference to equality between S and I.

Equilibrium level of income is determined at point when planned saving is equal to planned investment. SS curve is saving curve and II curve is investment c

## Question number: 40

» National Income and Related Aggregates » Methods of Calculating National Income » Expenditure Method

Essay Question▾

### Describe in Detail

A consumer buys 50 units of a good at a price of Rs. 10 per unit. When price falls to Rs. 5 per unit he buys 100 units. Find out price elasticity of demand by the ‘Total Expenditure Method’.

### Explanation

 Price (P) Quantity (Q) T. E. =P * Q 50 10 500 5 100 500

Since the total expenditure does not change with the change in price, thus price elasticity of demand will be one.

## Question number: 41

» National Income and Related Aggregates » Personal Income

Essay Question▾

### Describe in Detail

Calculate Personal Income from the following data:

 - ( Rs. crores) Undistributed profits of corporations 20 Net domestic product accruing to the private sector 500 Corporation tax 55 Net factor income from abroad (-) 10 Net current transfers from government 15 National debt interest 40 Net current transfers from the rest of the world 15

### Explanation

Personal Income = Net domestic product accruing to the private sector + Net factor income from abroad + Net current transfers from government + Net current transfers from the rest of the world + National debt interest - Corporation tax - Undistributed profits of corporations

Calculation of Personal Income

calculation of Personal Income

In this pe

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## Question number: 42

» National Income and Related Aggregates » Types of Goods

Essay Question▾

### Describe in Detail

Distinguish between the Normal good and Inferior good

### Explanation

 Normal good Inferior good Consumption of normal goods increase with the increase in the income of the consumer. Consumption of inferior goods increase with the decrease in the income of the consumer. Normal goods are the goods of daily importance and use, with a normal level of quality Inferior goods are the goods that are very low in quality.

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## Question number: 43

» National Income and Related Aggregates » Private Income

Essay Question▾

### Describe in Detail

Calculate ’ Net National product at Market price’ and ‘private income’ from the following data:

 - rs In crore Net factor income from abroad (-) 5 Private final consumption expenditure 100 Personal tax 20 Gross national disposable income 170 Government final consumption expenditure 20 Corporation tax 15 Gross domestic capital formation 30 Personal disposable income 70 Saving of private corporate sector (-) 10 Net exports 5 Net national disposable income 145

### Explanation

Net National product at Market Price = Private final consumption expenditure + Gross domestic capital formation +

Personal tax + Net exports - Gross national disposable income - Net national disposable income + Net factor income from abroad

= 100 + 30 + 20 - 10 + 170 - 145 - 5

= RS 110 crore

Private income = Government final consumption e

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