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

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Question number: 13

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

Essay Question▾

Describe in Detail

From the following data, calculate “national income” by (a) income method and (b) expenditure method:

calculate national income calculate national income by (a) income method and (b) expenditure method:

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( Rs. in crores)

Interest

150

Rent

250

Government final consumption expenditure

600

Private final consumption expenditure

1200

Profits

640

Compensation of employees

1000

Net factor income to abroad

30

Net indirect taxes

60

Net exports

(-) 40

Consumption of fixed capital

50

Net domestic capital formation

340

Explanation

(a) Income method

National income = Interest + Rent + Profits + Compensation of employees - Net factor income to abroad

=150 + 250 + 640 + 1000 – 30

= Rs. 2010 Crore

(b) Expenditure method:

National income = Government final consumption expenditure + Private final consumption expenditure +… (30 more words) …

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