aglasem.com CLASS XIl ECONOMICS NOTES NATIONAL INCOME and RELATED AGGREGATES Koy Notes and important Questions with AnsworsUNITV NATIONAL INCOME AND RELATED AGGREGATES Points to Remember Consumption Goods : Those final goods which are used by the consumers to satisfy human wants directly, All goods and services purchased by consumers are consumer goods. Q_ Capital Goods : Those final goods which are used for investment by the producers in production of goods and services. These goods are of durable nature. Final Goods : Those goods which are purchased either for final ‘consumption by consumers (consumers goods) or for investment by producers (capital goods). These are not for resale or for ‘further processing. Intermediate Goods : Those goods and services which are purchased for as @ raw material for further production or for resale in the same year. These goods do not fulfil needs of mankind directly. Services used by the producers are intermediate goods. e.g. Service of Lawyers, Mechanics, Charted Accountants, Raw Material eto. O_Investment : Value of addition made to the physical stock of capital during a period of time (financial year) is called investment. Iti also called capital formation. Depreciation : means fall in value of fixed capital goods due to ‘normal wear and tear, expected obsolescence and efflux of ime. Itis also known as consumption of fixed capital. Depreciation Class XII- Economies 60can be calculated by dividing the value of fixed capital by its expected life in years. Gross Investment : Total addition made to physical stock of capital during a period of time. It includes depreciation. Itis also known as Gross Capital formation. Net Investment : Net addition made to the real stock of capital during a period of time. It excludes depreciation. Net Investment = Gross investment - Depreciation. ‘Stock : Variables whose magnitude is measured at a particular point of time are called stock variables. e.g., Wealth, assets, money, Inventory etc. A stock variable is nothing but an accumulated sum of flows. Flow : Variables whose magnitude is measured over a period of time are called flow variable, Eg. National income, change in stock ete. Circular flow of income : It refers to continuous flow of goods and services and money income between firms and households in two sector economy. Itis circular in nature. It has neither any end nor any beginning point. Real flow shows the flow of produced goods and services and factor services between firms and households. Money flow shows the flow of consumption’ investment expenditure and factor payments between firms and households. Leakage : It is the amount of money which is withdrawn from circular flow of income. For e.g. Taxes, Savings and Imports. Injection :Itis the amount of money which is added to the circular flow of income. For e.g., Govt. Exp., Investment and Exports. Economic Territory : Economic (or domestic) Territory is the geographical territory administrated by a Government within which persons, goods and capital circulate freely. 61 Class XiI- EconomicsQ_— Scope of Economic Territory : (a) Political frontiers including territorial waters and airspace. (b) Embassies, consulates, military bases etc. located abroad. {c) Ships and aircraft operated by the residents between two or ‘more countries. (d) Fishing vessels, oil and natural gas rigs operated by residents in the international waters. Normal Resident of a Country : is a person or an institution who normally resides in a country and whose centre of economic interest lies in that country. Factor Income : Income eamed by the factors of production (Labour, Land, Capital and Enterpreneurship) for rendering factor services in the production process. e.g., Rent, Interest, wages and profit. Q_ Transfer payments : refers to income received without rendering any productrive service in retum. They are one sided payments made without getting anything in return e.g., old age pension, taxes, scholarships etc. Capital gain : An increase in the value of capital assets or financial assets over the time that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. Compensation of employees : Payment to labour factor {employees and workers) in cash or kind for providing factor services during the production of goods and services. Itincludes salary, wages, bonus, pension, contribution by emplyer in social sercurity schemes etc. (Operating Surplus : During the operation of production money left after the payment of compensation of Employees is called operating surplus. It is the sum of Rent, Interest and Profit. Subsidies : A subsidy is an amount of money given directly to firms by the government to encourage production and consumption. It reduce the market price. Class XII- Economies aValue of Output: Market value of all goods and services produced byan enterprise during an accounting year. Value of Output = Sales + Change in Stock. is the difference between value of outputof a firm termediate goods bought from the other firms during a particular period of time. Value added=value of output- Intermediate consumption. Domestic Income (NDP,,) : Itis the factor income accuring to ‘owners of factors of production for suppling factor services with in domestic territory during an accounting year. NDP, = GDP)yp ~ Depreciation — NIT. Gross Domestic Product at Market Pri market value of all the final goods and services produced by all producing units located in the domestic territory of a Country during an Accounting year. Net Domestic Product at Market Price (NDPyp) : NDPyp = GDP\_— Depreciation (Consumption of fixed capital) NATIONAL AGGREGATES Gross National Product at Market Price (GNPyp) is the market value of all the final goods and services produced by normal residents (in the domestic territory and abroad) of a country during an accounting year. GDP, + NFIA = GNPyp National Income (NNP,c) : It is the sum total of all factors incomes eamed by normal residents of a country in the form of, wages. Rent, Interest and profit during an accounting year in domestic economic territory as well as abroad. NNPzg = NOPg, + NFIA = National Income. ‘Some Important Relations (Gross = Net + Depreciation (consumption of fixed capital) National = Domestic + NFIFA (Net factor income from abroad) Market Price = Factor Cost + NIT (Net Indirect Tax) 63 Class XiI- EconomicsQ__Net Indirect Tax (NIT) = Indirect Tax— Subsidies Net Factor Income from Abroad (NFIFA) = itis diffrerence between factor income received/eamed by normal residents of a country and factor income paid to nonresidents of the country. ‘Components of NFIA >——_—_ 1. Net Compensation 2. Net Income from 3. Net Retained eaming of Employees Property and of resident companies enterpreneurship from abroad Methods of estimation of National Income Value Added Method (Product Method) : Gross Value Added at Market Price (GVA yp) = Sales + change in stock — Intermediate Consumption. = GDP yp =2GVAyp of all sectors OR = Value of output - Intermediate consumption NVA; = GVAyp— Depriciation —NIT D__ National Income = NNP, = GDP yp — Depreciation + NFIFA- NIT Steps to be followed : 1. Write Sales value (Add sales of all sactors if given sector wise) 3, Subtract: Intermediate consumption Capital goods are not intermediate good. You have reached GDP yp National Income (NNP,..) = GDP).— Depreciation + NFIA— NT Class XII- Economies 64Income Method (Factor Income distribution method): Domestic Income (NOP,q) = Compensation of Employees + Operating Surplus + Mixed income National Income (NNP,..) = NDP, + NFIFA, Stops to be followed : 4. Write compensation of Employees (if not given add salary, ‘wages, bonus, contribution by employer in social security schemes). 2. Add : Operating Surplus (If not Given add interest, Rent & Royalty and Profit). 3. Add : Mixed Income of self employed. You have reached NOP. g National Income (NNPfc) = NDP + NFIA Expenditure Method GDP yp =C+G +1 + (XM) Steps to be followed : 1. Write Private Final Consumption Expenditure 2. Add : Government Final Consumption Expenditure 3. Add : Gross Domestic Capital Formation 4, Add : Net Exports (Export — Imports) You have reached at GDP yp National Income (NNP.c) = GDP yj» ~ Depreciation + NFIA =NIT Problem of Double Counting : Counting the value of a ‘commodity more than once while estimating national income is called double counting. Itleads to overestimation of national income. So, itis called problem of double counting 65 Class XiI- Economics‘Components of Final Expenditure 41. Final Consumption 3. Net Export Expenditure OM) p+ |) Private Final i) Goverment Final Consumption Consumption Expendiure Expenditure © ‘s) Export import ~ a) 2. Gross Domestic Capital Formation (I) 4 (@ Gross Domestic {@) Change in Stock or Fred Captal Inventory investmert ‘ormation > (ajGr0ss businoss (©) Gross Residential (c) Gross public Faxes Investment ‘Construction Investment Investment Components of Domestic Income ——r— 1. Compensaton of 2. Operating 3. Mixed Income of Employees surplus sel-Employed person ‘a.Wages and b.Employers Rent & Royally Interest Profit selaries Contbution to (Cash or Social security kinds) Schemes Comporaie Dividend Undisributed Tax corporate profit Class XII- Economies 66GDP and Welfare : In general Real GDP and Welfare are directly related with each other. A higher GDP implies that more production of goods and services. It means more availability of goods and services. But more goods and services may not necessarily indicate that the people were better off during the year. In other words, a higher GDP may not necessarily mean higher welfare of the people. Real GDP : When the goods and services are produced by all producing units in the domestic territory of a country during an accounting year and valued at base year’s prices or constant price, is called real GDP or GDP at constant prices. It changes only by change in physical output not by change in price level. It is called a true indicator of economic devieopment, Nominal GDP : When the goods and services are produced by all producing units in the domestic territory of a country during an accounting year and valued at current year's prices or current prices, is called Nominal GDP or GDP at current prices. It is influenced by change in both physical output and price level. It is not considered a true indicator of economic development. Conversion of Nominal GDP into Real GDP Nominal GOP... Price index Price index plays the role of deflator deflating current price estimates into constant price estimates. In this way it may be called GDP deflator, Welfare mean material well being of the people. It depends on many economic factors like national income, consumption level quantity of goods etc and non-economic factor ike environmental pollution, law and order etc. the welfare which depends on economic factors is called economic welfare and the welfare which depends on non-economic factor is called non-economic welfare. The sum total of economic and non-economic welfare is called social welfare. The limitations in taking GDP as welfare measure are as follows Externalities : Externalities refer to benefits or harms of an Real GDP 100 67 Class Xil- Economicsactivity caused by a firm or an individual, for which they are not paid or penalized. For example, environmental pollution caused by industrial plants is 2 negative externality and building a flyover is a positive externally 2. Composition of GDP : GDP does not exhibit he structure of the product. If the increase in GDP is mainly due to increased production of war equipment’s and ammunitions, then such an increase cannot improve welfare in economy. 3. Distribution of GDP : When GDP is unevenly distrubuted, increase in GDP does not increase welfare. 4, Non-monetary exchanges : Many activities in an economy are ‘not evaluated in monetary terms, they are not included in GDP, due to non availabilty of data. However, such activities influence the economic welfare of people of the economy. Finally, it can be concluded that GDP may not be taken as a satisfactory measure of economic welfare due to above ‘mentioned limitations, yet it does reflect some index of economic welfare. PRECAUTIONS IN MAKING ESTIMATES OF NATIONAL INCOME. 1. Value added (Production) method : (@) Avoid double counting {b) Donotinclude sale of second hand goods. (¢)_ Self-consumed output must be included. 2. Income Method (a) Avoid transfer income (b) Avoid capital gain (©) Include income from self-consumed output (d) Include free services provided by the owners of the production units, 3. Final expenditure Method (a) Avoid intermediate expenditure Class XII- Economies 68(b) Do notinclude expenditure an second hand goods and financial © assets. Include expenditure an self use of own produced final products. (d) Avoid transfer expenditure. Exam. Oriented Questions withAnswer at Ans. a2 Ans. as. Ans. a4, Ans. as. Ans. as. Ans. VERY SHORT ANSWER QUESTION (1. MARK) What are the two types of circular flows ? ‘The two types of circular flows are : (i) Real flow (i) Money flow Define stock variables. ‘Stock variables refer to the variables, which are measured at a particular point of time. Define consumption goods? Consumption goods refer to those goods wi of the consumer directly, Define current transfers, satisfy the wants Current transfer refers to tranfers made out of the current income of the payer and added to the current income of the recipient. Define capital formation. Capital formation refers to addition to the capital stock of an ‘economy. Defined mixed income. Mixed income refers to the income generated by own account worker and unincorporated enterprises. Why do export form a part of domestic income? cy Class XiI- EconomicsAns. as. Ans. as. Ans. Ans. Ans. Exports are produced within the domestic territory, therefore it form a part of domestic income. What is real gross domestic product. When gross domestic product of a given year is estimated on the basis of price of the base year, itis called real GDP. When is value of output equal to value added? Value of output is equal to value added if there are zero Define national income. National income refers to net money value of all the final goods and services produced by the normal residents of a country during a period of one year. It is the factor income earned by normal residents of aCountry during financial year. ‘SHORT ANSWER TYPE QUESTION (3-4 MARKS) Calculate gross value added of factor cost : (Units of output sold (units) 1000 (ii) Price per unit of output (Rs.) 30 (il) Depreciation (Rs.) 1000 {iv)_ Intermediate cost (Rs.) 12000 (¥)_ Closing Stock (Rs.) 3000 (vi) Opening Stock (Rs.) 2000 (wi) Excise duty (Rs.) 2500 (vil) Sales Tax (Rs.) 3500 GVAge (i * i) + (v — vi) = (iv) ~ (vil + vill) = (1000 x 30) + [3000 - 2000] ~ 12000 ~ [2500 + 3500] = Rs. 13000 Class XII- Economies 70a2 Ans. as. Ans. a4. Ans. Calcualte Net Value added at factor cost : () Consumption of Fixed Capital (Rs.) ji) Import Duty (Rs.) (ii) Output sold (units) (iv) Price per unit of output (Rs.) (v) Net change in stock (Rs.) (vi) Intermediate cost (Rs.) (vi) Subsidy (Rs.) NVApc = (ll iv) + v= viii vil = (2000 x 10) + (-50) ~ 10000 - 400 + 500 - 600 = Rs, 9450. Find Net Value added at market price : (Output sold (units) Price per unit of utput (Rs.) (ii) Excise duty (Rs.) {iv) Import duty (Rs.) (W)_ Net Change in Stock (Rs.) (vi) Depreciation (Rs.) (vii) Intermediate Cost (Rs.) NVApp = (1 il) + v= vii — vi = (B00 * 20) + (500) — 8000 ~ 1000 = Rs. 6500. 600 400 2000 10 (150 10000 500 800 20 1600 400 (-)500 1000 8000 Assuming real income to be Rs. 200 Crore and price index to be 135, Calculate nominal income. Nominal Income = 100 Real Income = Se dan 200 x 135 Nominal Income = => = Rs. 270 Cr. ” Class Xil- Economicsas. Ans. as. Ans. az. Ans. Ans. Given nominal income to be Rs. 375 Crore and price index 125 calculate real income, Real Income = Nominal income ,. 499 Price Index _ 375100 125 Real Income = Rs. 300 Crore. ifthe real gross products Rs. 200 and the nominal goss product is Rs. 210, calculate the price index (base = 100) Nominal GDP Nominel GDP ad Real GDP = “Eo ngex * 100 Nominal GDP 210 Price Index = SPR ST * 100 = Fx 100 Price Index = 105 Giving reasons classify the following into intermediate products and final products : (Computer purchased by a school (ii) Cold drinks purchased by a school canteen. Itis final product because itis purchased for final investment. These are intermediate products because these are taken for resale in the same year. Giving reasons, explain the treatment assigned to the follwing while estimating national income. (Family members working free on the farm owned by the family. (i) Payment of interest on borrowings by general government. (i) Imputed salaries of these members will be included in ‘rational income. twill not be included in national income because it is non- factor payment as itis considered that general government borrows only for consumption purpose. Class XII- Economies 2as. Ans. att. Ans. Q.12, Ans. Giving reasons, explain the treatment assigned to the following while estimating national income. (i) Payment of pocket money by parents (ii) Interest free loan given by employer to employee. (i)_ Not included, as it is transfer payment from parents to children. (ii) Included, as it is treated in national income because it is part of compensation of employees in kinds. Explain the basis of classifying goods into intermediate and final goods. Give suitable examples. Goods which are purchased by a prodution unit from other production units and meant for resale or for using up completely during the same year are called intermediate goods. For ‘example: raw material. Goods which are purchased for consumption and investment are called final goods. For Example : Purchase of machinery for installation in factory. Giving reason classify the following into intermediate and final goods. (i) Machine Purchased by a dealer of machine. (i) Acar Purchased by a household. {i)_Itis an intermediate good because it is meant for resale in the market. Itis a final good because its meant for final consumption. How will you treat the following in estimating national income of India? Give reasons for your answer. () Value of bonus shares received by shareholders of a company. (ii) Interest received on loan given to a foreign company in India. {i)_Itis not included in national income because itis the return of financial capital and not of the goods and services, (ii) It is included in the national income as interest is @ factor income and a part of domestic income. 73 Class XiI- EconomicsQ. 13. Government spends on child immunization programme. Analyse its impact on gross domestic product and welfare of the people. ‘Ans. Government expenditure on child immunization programme raises GDP because it is government's is final consumption expenditure. It also raises welfare of the people because child immunization programme improve health and thus raise efficiency of the people. Q.14. Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on Gross Domestic Product and Welfare. ‘Ans. Final sales of cars raises GDP, because final sales are final products. Cars provide convenience in transportation but at the same time it causes traffic jams, air pollution and noise pollution reducing the welfare of the people. Pollution reducing the welfare of the people. Pollution thus, has bad effects on the health ofthe people. LONG ANSWER TYPE QUESTIONS (6 MARKS) How wil you treat the following while estimating national income of India? Give reasons. (a) Dividend received by an Indian from his investment in shares of a foreign company, (b) Money received by a family in India from relatives working abroad. (©) Interest received on loans given toa friend for purchasing a car. (d) Dividend received by a foreigner from investment in shares of an Indian company. (e) Profit eamed by a branch of an Indian Bank in Canada. (f) Scholarship given to Indian students studying in India by a foreign company. (g)_Fees paid by students to school (h) Profits eamed by branch of a Foreign Bank in India. ()_ Interest paid by an individual on a loan taken to buy a car. (Expenditure on machines for installation in @ factory. Class XII- Economies 4(kK) w (m) (n) (0) (p) @) i) ©) o (a) (b) © @) ) 0 (9) (n) 0 0 (k) w Goverment expenditure on street lighting. Increase in prices of the shares of a company. Interest received by an Indian resident from firms abroad. Expenditure incurred by a foreign tourist in the country. Construction of a new house. Rent paid by embassy of Japan in India o.an Indian resident. Imputed rent of self occupied house Interest received on debentures Financial help received by flood victims. Furniture purchased by household Itis factor income from abroad so will be included in national income. Itis transfer receipts, so itis not includeed in national income. Not included in National Income, because it is a non-factor receipt as it is used for consumption. Not included as NF to abroad. Its a part of NFIA and will be included in national income. Itis transfer receipts, so itis not included in national income. It is included in national income because it is a part of the privatelfinal consumption expenditure of the house hold. included in national income because it is part of factor income to abroad. Not included because it is a non-factor income as loan is ‘not used for production but for consumption. Included because it results in flow of income through productive activities. Includes, because it is final consumption expenditure by government. Not included, because with production. is capital gain and nothing to do 15 Class XiI- Economics(m) Included, as itis the part of NFIA. (n) Included, as itis earned within the domestic territory of India. (0) Included, because currently produced output. (p) included as it is paid to an Indian resident out side the domestic territory of a country. It will be included in NFIA. (@) Included, as a part of rent as itis payment to self for housing services, (f)_ Included, because it is a factor earning, (6) Not included as itis a transfer payment. (0) Included, because it is a private final consumption expenditure. Q.2. Howwill you treat the following while estimating domestic factor income of India? Give reasons. (i) Remittances from non-resident Indian to their families in India. (ii) Rent paid by the embassy of France in India to a resident Indian, Profit eared by branches of Fi Payment of salaries to its staff by embassy located in India. Interest received by an Indian resident from firms abroad. (vi) Scholarships given by the Government of India. Ans. (i) Not included as itis a transfer payment (ii) Not included because French embassy in India does not fall within the domestic territory of India. Included because it falls with in the domestic territory of India. Bank in India. (iv) Not included as an embassy located in India is not fall with In the domestic territory of India. (¥)_ Notincluded in domestic income as itis does not fall with in the domestic territory of India Class XII- Economies 76(vi) Not inclued, as itis transfer payment. @.3. Giving reasons explain how should the following be treated in estimating gross domestic product at market price? @ w (i) Ans. (i) ) Fees to a mechanic paid by a firm Interest paid by an bank. Expenditure on purchasing a car for use by a firm. Fees paid to mechanic by a firm is not included because it is an intermediate cost of the firm and to avoid double eaming. Interest paid by an individual is not included because the loan is taken to meet consumption expenditure and therefore interest paid on such a loan is not a factor payment. Expenditure on purchase a car by a firm is included because itis an investment expenditure, a final expenditure. jividual on a car loan taken from a NUMERICAL EXERCISE 4. Calculate "Sales" from the following data : ARs. in Lakh) ()_ Net value added at factor cost 560 (ii) Depreciation 60 (ii) Change in Stock (930 {iv)_ Intermediate cost 1000 (W) Exports 200 (vi) Indirect taxes 60 2. Calculate NVA,,, from the following data (Rs. Crore) () Subsidy 40 Sales 800 (ii) Depreciation 30 (iv) Exports 100 (W)_ Closing stock 20 7 Class Xil- Economics(vi) Opening stock (vi) Intermediate purchases (vil) Purchases of machinery for own use (ix) Import of raw material 50 500 200 60 3. From the following information about a firm in an economy, calculate GVA, of the firm. () Domestic Sales (i) Exports (ii) Production for self-consumption (iv) Purchases from firm X (¥)_ Purchases from firm Y (vi) Imports of raw materials (wi) Change in stock (Rs. Crore) 300 100 80 110 70 30 60 4. Calculate (a) NNP-c by expenditure method and (b) NNPro by value added method : ()_ Net Domestic capital formation (ii) Net Export (ii) Private final consumption expenditure (iv) Value of output (a) Primary ector (b) Secondary sector (©) Temitory sector (¥)_ Value of intermediate consumption (@) Primary sector (b) Secondary sector (6) Teritory sector (vi) Consumption of fixed capital Class XII- Economies 78 (Rs. Crore) 250 50 900 900 800 400 400 300 100 80wi) (vit) ) ®) Indirect Tax Government final consumption expenditure Subsidy Net factor income from abroad 100 100 10 (20 5. From the following data calculate National Income by income and expenditure method : 0) “i Gil) 0) ” w) wi) (vi) ®) &) «) iy (xii) (iv) Goverment final consumption expenditure Subsidies Rent ‘Wages and salaries Indirect Taxes: Private final consumption expenditure Gross domestic capital formation Social security contribution by employers Royalty Net factor income paid to abroad Interest Net domestic capital formation Profit Net Export (Rs. Crore) 100 10 200 600 60 800 120 55 25 30 20 110 130 70 6. Calculate ‘Intermediate consumption’ from the following data : @ wo Gi) (iy) ) Value of output Net value added at factor cost. Sales tax Subsidy Depreciation (Rs. Lakh) 200 80 15 5 20 9 Class XiI- Economics7. Calculate (a) GDPyyp (b) Factor income earned from Abroad : (Rs. Crore) () GNP rg 2800 Profit 500 (ii) Export 40 (iv) Compensation of Employees 1500 (¥)_ Change in Stock 50 (vi) Net indirect Tax 250 (vii) Net domestic capital formation 650 (vill) Gross domestic fixed capital formation 700 (ix) Net current transfers from rest of the world 90 (%) Factor income paid to abroad 120 (xi) Interest 400 (xi) Rent 300 8. Calculate (a) Domestic Income (b) Compensation of employers. (Rs. Crore) ()_ Net factor income from abroad -20 (il) Net exports 10 (i) Net indirect taxes 50 (iv) Rent and royatty 20 (¥)_ Consumption of fixed capital 10 (vi) Private final consumption expenditure 400 (Wil) Corporate tax 10 (vill) Interest 10 (ix) Net domestic capital formation 50 (%) Dividends 22 (xi) Government final consumption expenditure 100 (xi) Undistributed profits 5 (xi) Mixed income 23 Class XII- Economies 8010. " Calculate Net National Product at Market Price Income (Rs. Crore) ()_ Net current transfers to abroad 10 ji) Private final consumption expenditure 500 Current transfers from government 30 {iv)_ Net factor income to abroad 20 (W)_ Net exports (920 (vi) Net indirect tax 120 (vil) National debt interest 70 (vill) Net domestic capital formation 80 (ix) Income accruing to government 60 () Government final consumption expenditure 100 Calculate value of output from the following data : (Rs. Crore) () NVAge 400 (ii) Intermediate consumption 75 (ii) Excise duty 20 (iv) Subsidy 5 (¥)_ Depreciation 10 Calculate GOP, and factor income to abroad from following data: (Rs. Crore) (Compensation of employees 800 (Profit 200 (ii) Dividends 50 (iv) Gross National Product at Market price 1400 (W)_ Rent 150 (vi) Interest 400 (vii) Gross Domestic fixed capital formation 200 at Class XiI- EconomicsNet domestic capital formation 200 Change in stock 50 Factor income from abroad 60 Net indirect taxes 120 SOLUTIONS OF NUMERICAL EXERCISE Sales = (i)~(ii) + (v) + (i) + (wv) 560 — (-30) + 1000 + 60 + 60 = Rs. 1710 Lakh 2. NVArg ales + AS ~ IC - NIT - Depr. = (ii) + (v= vi) — (wil) + (i) - Gil) = 800 + (-30)- 500 + 40-30 = Rs, 280 lakh. 3. GVAyp = Sales + Change in stock — IC C) + (i) + Gi] + (Vi) KG) + (W) + ()) = (300 + 100 + 50) + 60 [110 + 70 + 30} = Rs, 300 crore. 4. NNPro (Expenditure Method) = (+ Gi) + (id + (vip — (vi) + (os) — (WI) +) = 250 +50 +900 + 100 ~ 100 + 10 ~ 80 + (-20) = Rs, 1110 Cr. NNP;¢ (Value added method) = (iv) (W)— (vi) = (il) + (08) # () = (800 + 800 + 400) — (400 + 300 + 100)- 80-100 +10 +(-20) = Rs, 1110 Cr, Class XII- Economies 82."National inoome NP, (Ineome Method) = (iv) + (vl) + i) + (be) + (xi) + (xi) — (0) = 600 + 55 +200 + 26 + 20 + 130 + (-30) =Rs, 1000 Cr. ‘National Income (Exp. Method) = (vi) + () + (vil) + (xv) ~ (vil) ~ (v =I) ~ (%) = 800 + 100 + 120+ 70- 10-50-30 = Rs, 1000 Cr. Intermediate consumption = Value of output — NVA, — NIT — Depreciation = 200-80 - (15 -5)-20 = 200-80-10-20 = Rs. 90 Lakh, {a) NDP eg = (iv) + (i) + (xi) + = 1500 + 500 + 400 + 300 = 2700 GDPy. = NDP rg + depreciation + NIT = 2700 + (vii + v)—vill + (vi\(- dep, = GDCF -NOCF) = 2700 + [(700 + 500) — 650] + 250 GDPy, = Rs. 3050 Cr. {b) Factor Income from abroad (FIFA) GNP ro = GDP yp NIT + NFIA 2800 = 3050 + 250 + NFIA 2800 = 2800 + (FIFA-FITA) 0 =FIFA-120. FIFA = Rs, 120 Cr. 83, Class XiI- Economics8 (a) Domestic Income = (i) + (vi) + (ix) + (xi) (il) = 10+ 400 + 50 + 100-50 = Rs. 510 Cr. {b) Compensation of employees = Domestic Income — (iv) ~ (vii) (vi) — (x) — (xi) — (il) =510-20-30-10-22-5-23 = Rs, 400 Cr. 9. NNP ip = (i 1) + (vill) + (il) + (v) = (iv) = 500 + 100 + 80 + (-20) - (20) = Rs, 640 Cr. 10. Value of output NVAgo = VO -IC - NIT — Depreciation VO =NVAgg + IC + NIT + Depreciation = 100 +75 + (20-5) +10 VO = Rs. 200 Cr. 44, (a) GDP pe = (i) + (ll) + (v) + (vi) + [vi + bx) — vil] = 800 + 200 + 150 + 100 + [(200 + 50) - 200) GDP;o = Rs. 1300 Cr. [:: Dep = GDCF - NDCF] {b) Factor income to abroad GNP yp = GDP po + NIT + NFIA 1400 = 1300 + 120 + FIFA—FITA 1400 = 1300 + 120 + 60—FITA 1400 - 1480 =— FITA Rs. 80 Cr= FITA Class XII- Economies 84