Calculate national income from the following:
   

(र in crores)

(i)

Rent

80

(ii)

Interest

100

(iii)

Profits

210

(iv)

Tax on profits

30

(v)

Employees contribution to S.S. schemes

25

(vi)

Mixed income of self-employed

250

(vii)

Net indirect taxes

60

(viii)

Employer's contribution to S.S. schemes

50

(ix)

Compensation of employees

500

(x)

Net factor income from abroad

(-) 20

 

Domestic income = 80 + 100 + 210 + 250 + 500 = 1,140
National income = 1,140 + (- 20) = 1,120 crores

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From the following data find out (a) NNP at MP, (b) Private income, and (c) Personal Disposable Income.  

   

(र in crores)

(i)

GDP at FC

2,570

(ii)

Indirect taxes

850

(iii)

Subsidies

125

(iv)

Net factor income from abroad

-5

(v)

Savings of non-departmental enterprises

15

(vi)

Income from property and entrepreneurship accruing to Govt. administrative departments

100

(vii)

Consumption of fixed capital

290

(viii)

Interest on public debt

60

(ix)

Current transfer from government

245

(x)

Other current transfers from the rest of the world

310

(xi)

Corporation tax

190

(xii)

Savings of private corporate sector

85

(xiii)

Direct taxes paid by households

500


(a) NNP at MP = 2,570 + 850 - 125 - 5 - 290 = 3,000 crores.
(b) Private Income = 3,000 - 850 + 125 - 15 - 100 + 60 + 245 + 310 = 2,775 crores.
(c) PDI = 2,775 - 190 - 85 - 500 = 2,000 crores.

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Calculate national income from the following:

   

(र in crores)

(i)

Mixed income of self-employed

200

(ii)

Old age pension

20

(iii)

Dividends

100

(iv)

Operating surplus

900

(v)

Wages and salaries

500

(vi)

Profits

400

(vii)

Employer's contribution to S.S. schemes

50

(viii)

Net factor income from abroad

(-) 10

(ix)

Consumption of fixed capital

50

(x)

Net indirect taxes

50

 


Domestic income = 200 + 900 + 500 + 50 = 1,650
National income = 1,650 + (- 10) = 1,640 crores

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From the following data calculate GNP at MP via the income method.

   

(र in crores)

(i)

Wages and salaries

700

(ii)

Rent

100

(iii)

Depreciation

50

(iv)

Net factor income from abroad

- 10

(v)

Mixed income

400

(vi)

Subsidies

100

(vii)

Profits

400

(viii)

Indirect taxes

300

(ix)

Employers contribution to S.S. Schemes

50

(x)

Interest

40

 

NDPFC = 700 + 100 + 400 + 400 + 50 + 40 = 1,690
GDPMP = 1,690 + 50 - 100 + 300 = 1,940
GNPMP = 1,940 + (- 10) = 1,930 crores

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Explain the expenditure method of measuring national income.

Expenditure Method. Expenditure method measures final expenditure on 'Gross Domestic Product at market price (GDP at MP)' during a period of account. Since all domestically produced goods and services are purchased for final use either by consumers for consumption or by producers for investment, therefore we take sum of final expenditure on consumption and investment. This sum equals GDP at MP. Under expenditure method national income is calculated first by adding up all the items of final consumption expenditure and final investment expenditure within domestic economy during a year. The resulting total is called GDP at MP. Then by subtracting depreciation and net indirect taxes from GDP at MP and adding to it net factor income from abroad, we get NNP at FC or national income. Thus in expenditure method, national income is measured at the point of actual expenditure by various economic units.
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