National Income and Related Aggregates-Methods of Calculating National Income (CBSE Class-12 Economics): Questions 9 - 12 of 13

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Question number: 9

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

Appeared in Year: 2006

Essay Question▾

Describe in Detail

calculate national income.

calculate national income by income method and expenditure method

-

Rs. (in Crores)

Private final consumption expenditure

2000

Net capital formation

400

Change in stock

50

Compensation of employees

1900

Rent

200

Interest

150

Operating surplus

720

Net indirect tax

400

Employers’ contribution to social security schemes

100

Net Exports

20

Net factor income from abroad

(-20)

Government final consumption expenditure

600

Consumption of fixed capital

100

Explanation

(A) Income method

National income = Operating surplus + Compensation of employees + Net factor income from abroad

= 720 + 1900 + (-20)

= Rs. 2600 crores

Expenditure Method = Private final consumption expenditure + Net capital formation + Government final consumption expenditure + Net exports - Net indirect… (23 more words) …

Question number: 10

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

Essay Question▾

Describe in Detail

Explain the ‘expenditure’ method of estimating national income.

Explanation

The expenditure method of measuring National Income is also called Income disposal Method. Expenditure method is a method which measures the final expenditure on gross private product at market price during an accounting year.

Then all privately produced goods and services are purchased for final use either by consumers for… (241 more words) …

Question number: 11

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

Essay Question▾

Describe in Detail

From the following data calculate National Income by Income and Expenditure methods:

calculate National Income by Income and Expenditure methods

Find National Income by Income and Expenditure methods

(Rs crore)

Government final consumption expenditure

100

Subsidies

10

Rent

200

Wages and salaries

600

Indirect taxes

60

Private final consumption expenditure

800

Gross domestic capital formation

120

Social security contributions by employers

55

Royalty

25

Net factor income paid to abroad

30

Interest

20

Consumption of fixed capital

10

Profit

130

Net exports

70

Change in stock

50

Explanation

National income by income method = Rent + Royalty + wages and salaries + Social security contributions by employers + Interest + Profit - Net factor income paid to abroad

= 200+25+600+55+20+13030

=rs1000crore.

National income by expenditure method… (54 more words) …

Question number: 12

» 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… (4 more words) …

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