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

The equilibrium level of national income

The Equilibrium Level of National Income

This image of equilibrium level of national income

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

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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

Elasticity of demand by the Total Expenditure Method.

In this table elasticity of demand by the Total Expenditure Method.

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

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Question number: 41

» National Income and Related Aggregates » Personal Income

Essay Question▾

Describe in Detail

Calculate Personal Income from the following data:

Calculate Personal Income

Calculate Personal Income in detail.

-

( 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

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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

Distinguish between Normal good and Inferior good

In detail Normal good and Inferior good difference.

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

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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:

Calculate Net National product at Market price and private income

Calculate Net National product at Market price and private income in detail

-

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

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