Question

calculate the national income : domestic sales=5000, opening stock=600, closing stock=200,imports=300,NIT=600, depreciation=700,NFIA=1000, domestic consumption=3000​

Answer 1

Answer:

Solution :

• 1. Income Method GNPFC = Compensation of employees + Rent + Interest + Undistributed Profits + Dividend + Net
• Factor Income from Abroad + Consumption of fixed capital = 1850 + (400 +500 +900 + 200) + (-) 50+ 100 = 3900
• CRORE Note: o GNPFC = NNPFC + Consumption of fixed capital o NNPFC = Compensation of employees + Rent +
• Interest + Undistributed Profits + Dividend + Net Factor Income from Abroad o Compensation of employees is
• income from work which includes wages and salaries in kind and cash, and contribution to social securities
• ii. Expenditure Method GNPFC = GNPMP - Net Indirect Taxes Private Final consumption Expenditure + (Net
• Domestic capital formation + consumption of fixed capital) + Govt. Final consumption Expenditure + Net Exports +
• Net Factor Income from Abroad - Net Indirect Taxes = 1100 +2600 + (500 +100) + (-) 100 + (-)50 – 250 = 3900 CRORE
• Note : GNPMP = Private Final consumption Expenditure + Gross Domestic capital formation + Govt. Final consumption Expenditure + Net
• Export + Net Factor Income from Abroad o Gross Domestic capital formation = Net Domestic capital formation + Consumption of fixed capital) o
• Export – Import = Net Export o Net Factor Income from Abroad = Factor Income from Abroad – Factor Income Paid to Abroad GNPFC = GNPMP - Indirect tax + Subsidy = GNPMP - (Indirect tax – subsidy) = GNPMP - Net Indirect tax
• 2.(i)GDP at factor cost = NDP at factor cost + Depreciation = Compensation of employees+ Rent+ Interest+ Profit
• +Mixed income+ (Gross domestic capital formation - Net domestic capital formation) = =Rs 3,000crore + Rs 800 crore + Rs 900 crore + Rs 1,300 crore + (Rs 900 crore - Rs 800 crore) = Rs 6100 crores
• (ii) Gross Domestic Product at Market Price = GDP at factor cost + Net Indirect taxes =Rs 6100 + Rs300 crore = Rs 6,400crore
• 3.a) Value added by firm A = Sale to households +Sales to firm B + Exports by firm A – Imports by firm A – Purchase from firm B = Rs 90 + Rs 40+ Rs 20- Rs 50- Rs 30 = Rs 70 Lakh
• Value added by firm B = Sales to Firm A + Sales to households – purchase from firm A = Rs 30+ Rs 60- Rs 40 = Rs 50 Lakh
• b) GDPMP = Value added by firm A + value added by Firm B = Rs 70+ Rs 50 = Rs 120 Lakh
• 4. Hints: National income (or NNP at factor cost) = NNP at Market Price – Indirect Tax + subsidy = NDP at Market
• Price + NFIA – Indirect Tax + subsidy = (GDP at market price – Capital consumption expenditure) + NFIA – Indirect + subsidy
• Or National income (or NNP at factor cost) = (GDP at market price – Capital consumption expenditure) + NFIA – Indirect + subsidy = (Contribution by Primary sector + Contribution by Primary sector + Contribution by Primary sector – Capital consumption expenditure) + NFIA - Indirect + subsidy
• 6.Hints A. National income or NNP at factor cost = NDPfc + NFIA B. National income or NNP at factor cost = GNPfc