Expenditure + Net Domestic Capital Formation + Net Exports + Net Factor Income from Abroad- Net Indirect Taxes (Foreign 2014) Calculate sales from the following data (All India 2013), 2. 730 crore, (b) Private Income = NNPFC Net Domestic Product at Factor Cost Accruing to Government+ Transfer Payments + National Debt Interest On the other hand, the Domestic Net Product at factor cost (NDP-FC) only considers the labor and capital used to produce them. Components of Final Expenditure: = 900 + 400 + 250-30-100-20 + (-40) (ii) GNP (at FC): Gross National Product at factor cost. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. Calculate Net National Product at Factor Cost and private income from the following (Delhi 2014), 34. (ii) Yes, it is included while estimation of National Income as it is considered as a change in stock during the year. Calculate Net Domestic Product at Factor Cost by the expenditure method and production method (All India 2010), Ans. (ii) Payment of salaries to its staff by an embassy located in New Delhi. (b) Gross National Disposable Income (GNDI) (ii) It is not included in the estimation of GDPMPbecause loans are not used for production purpose. Net national product (NNP) is the total value of finished goods and services produced by a country's citizens overseas and domestically, minus depreciation. (i) Remittances from non-resident Indians to their families in India. Attiguppe , Bengaluru - 560040, Now reach all our Branches with ease!!!! Calculate = 1220-270 = Rs. Precautions While Using Income Method Some of our partners may process your data as a part of their legitimate business interest without asking for consent. When we divide NI by a countrys total population, we get residents per capita income. small group of firms) but deals with the study of broad economy-wide aggregates like total output, size of national income, level of employment, aggregate consumption, aggregate saving, aggregate investment, general price level, balance of payment, rate of inflation, size of poverty etc. Calculate (i) Gross National Product at Market Price It ascertains the economic performance, wealth, and growth of a country. NNP FC = NDP FC + Factor income earned by normal residents from abroad - factor payments made to abroad. 3. In short, NDP FC = Compensation of Employees + Rent and Royalty + Interest + Profit + Mixed Income Step 4: Estimate net factor income from abroad (NFIA) to arrive at National Income: In the final step, NFIA is added to domestic income to arrive at National Income (NNP FC ), i.e. (i) Interest on a car loan paid by an individual should not be included while estimating National Income as the loan is taken for consumption purpose. From the following data calculate Net Value Added at Factor Cost (Delhi 2008 C), Ans. 37. Investopedia does not include all offers available in the marketplace. 685 arab The result provides a more accurate picture of a countrys economic output. Above Village Hyper Market, Chandralyout Main Road, GDP at MP = 400 + 100 + 50 - 150 - 20 + 100 = 480 croresNDP at FC = 480 - 60 - 20 = 400 crores x. Ans. (b) Net National Disposable income from the following data It is shown as: NDP FC = GDP MP - Net Indirect tax - Depreciation 5. Also, it does not account for indirect taxes and subsidies. The depreciation accounted for is often referred to as capital consumption allowance and represents the amount needed to replace those depreciated assets. Find out Your Mobile number and Email id will not be published. (i) No, it is not included while estimation of National Income as it is not a factor income. 6,000 Crores Solution: NDP at FC = Compensation of employees + Operating surplus + Mixed income of self-employed + Income from domestic products accruing to public sector = Rs. Governments consider NI crucial for the following reasons: NI is the sum of the monetary value of all the goods and services produced during a financial yearan aggregation of production units belonging to a countrys residents. (Delhi 2009). (ii) National debt interest. + (Excise Duty Subsidy) + Intermediate Consumption From the following data calculate Net Value Added at Factor Cost (Delhi 2011 c) at Factor Cost (NVAFc)+ Depreciation + (Sales Tax-Subsidy) 232, Block C-3, Janakpuri, New Delhi, = Rs. = Rs. = 1200 + 600+ 340 + (-40)-60-30 Delhi - 110058. It deals with individual income, individual prices and individual outputs, etc. (a) Gross Domestic Product at Factor Cost and (iii) Profits earned by branches of foreign bank in India. Net Domestic Product at Factor Cost (NDPFC) = 750-450 = Rs. How It Works and Examples, Nominal Gross Domestic Product: Definition and How to Calculate, What Real Gross Domestic Product (Real GDP) Is, How to Calculate It, vs Nominal, Aggregate Demand: Formula, Components, and Limitations. (a) Income method and Methods of Calculating National Income, (i) Income method (ii) Profits earned by an Indian company from its branches in Singapore will be included while estimating National Income of India, as it is a factor income from abroad. Ans. What do you understand by domestic income (NDP FC)? Ans. Calculate Personal Disposable Income: (Compartment 2014), Ans. 200 crore Giving reasons, explain how the following are treated while estimating National Income? = NNPFC+ Net Indirect Tax + Consumption of Fixed Capital Net Current Transfer to Abroad = 685 + (120-20) + 35 -(- 15) Depreciation - cost allocated to a tangible asset over its useful life. Required fields are marked *. Calculate It is broadly classified into four categories: (All India 2009). Give reasonsfor your answer. In other words, GDP measures the total value of all goods and services produced within a country. 300 lakh, 19. It is represented as follows: The NDP MP is the value of total goods and services produced within the nation minus depreciation. Ask questions, doubts, problems and we will help you. 6570 crore, (b) Net National Disposable Income (NNDI) = GNPFC + Net Indirect tax Consumption of Fixed Capital+ Net Current Transfers from Rest of the World = 6570+ 800 100 + (70 40) NDP does not consider the effects of indirect taxes and subsidies, which can distort market prices. It refers to the market value of final goods aand servicess produced within the domestic territory of a country during the period of an accounting year, exclusiive of depreciation. It is a measure of the total value of all goods and services produced within a countrys borders, adjusted for the decline in the value of physical capital over time due to wear and tear, obsolescence, and other factors. = 310+ (20- 10)+ 15+ 25+ (- 5) 1950 crore, (b) By Production Method 30.Giving reason, explain how are the following treated in estimating NationalIncome method (Delhi 2010 c) 5500 crore Gross Domestic Product at Market Price (GDPMP), Gross Domestic Product at Factor Cost (GDPFC), Net Domestic Product at Market Price (NDPMP), Net Domestic Product at Factor Cost (NDPFC), Gross National Product at Market Price (GNPMP), Gross National Product at Factor Cost (GDPFC), Net National Product at Market Price (PMP), Net National Product at Factor Cost (NNPFC). Investment4. Net Domestic Product at Factor Cost (NDPFC) = Value of Output in Economic Territory-(Intermediate Purchase by Primary Sector+ Intermediate Purchase by Secondary Sector + Intermediate Purchase by Tertiary Sector)-Consumption of Fixed Capital Indirect Taxes (All India 2011), Ans. 3900 crore, 72. It helps to solve the central problem of full employment of resources in the economy.. (ii) Expenditure method (a) Income method and 660 crore, 54. (a)Income method and Switch; Flag; (i) Payment of bonus by a firm. = (800 + 50) (400 +100) 40 + 30 94 Views. Intermediate Goods Consumption of Fixed Capital Indirect Taxes How will you treat the following while estimating National Income of India? 29.Giving reason, explain how are the following be treated in estimation of NationalIncome by income method (All India 2010) (ii) Net National Disposable Income (All India 2011), 57. (Delhi 2008). = 515+(30-5) +15 = 515+25+15 This leads to over estimation of the value of goods and services produced. = 3500 + 50 2000 500 350 Calculate . Download the PDF Question Papers Free for off line practice and view the Solutions online. 60 lakh, 18.Calculate Net Value Added at Factor Cost from the following data, Ans. It can be classified into following components: (iv) Consumption of fixed capital (All India 2008), Chapterwise Important QuestionsImportant Questions EconomicsNCERT Solutions, Filed Under: CBSE Tagged With: Class 12 Economics, economics Methods of Calculating National Income, RD Sharma Class 11 Solutions Free PDF Download, NCERT Solutions for Class 12 Computer Science (Python), NCERT Solutions for Class 12 Computer Science (C++), NCERT Solutions for Class 12 Business Studies, NCERT Solutions for Class 12 Micro Economics, NCERT Solutions for Class 12 Macro Economics, NCERT Solutions for Class 12 Entrepreneurship, NCERT Solutions for Class 12 Political Science, NCERT Solutions for Class 11 Computer Science (Python), NCERT Solutions for Class 11 Business Studies, NCERT Solutions for Class 11 Entrepreneurship, NCERT Solutions for Class 11 Political Science, NCERT Solutions for Class 11 Indian Economic Development, NCERT Solutions for Class 10 Social Science, NCERT Solutions For Class 10 Hindi Sanchayan, NCERT Solutions For Class 10 Hindi Sparsh, NCERT Solutions For Class 10 Hindi Kshitiz, NCERT Solutions For Class 10 Hindi Kritika, NCERT Solutions for Class 10 Foundation of Information Technology, NCERT Solutions for Class 9 Social Science, NCERT Solutions for Class 9 Foundation of IT, PS Verma and VK Agarwal Biology Class 9 Solutions, National Income Accounting Important Questions for class 12 economics Methods of Calculating National Income, (a) Gross Domestic Product at Market Price and, economics Methods of Calculating National Income, NCERT Solutions for Class 10 ScienceChapter 1, NCERT Solutions for Class 10 ScienceChapter 2, Periodic Classification of Elements Class 10, NCERT Solutions for Class 10 ScienceChapter 7, NCERT Solutions for Class 10 ScienceChapter 8, NCERT Solutions for Class 10 ScienceChapter 9, NCERT Solutions for Class 10 ScienceChapter 10, NCERT Solutions for Class 10 ScienceChapter 11, NCERT Solutions for Class 10 ScienceChapter 12, NCERT Solutions for Class 10 ScienceChapter 13, NCERT Solutions for Class 10 ScienceChapter 14, NCERT Solutions for Class 10 ScienceChapter 15, NCERT Solutions for Class 10 ScienceChapter 16, CBSE Previous Year Question Papers Class 12, CBSE Previous Year Question Papers Class 10. So, it is a part of domestic factor income. Calculate National Income from the following data (Delhi 2013), = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation Net Imports Net Indirect Taxes Consumption of Fixed Capital + Net Factor Income from Abroad How should the following be treated while estimating National Income? (i) Expenditure on education of children by a family is included in the estimation of National Income as it is a part of final consumption expenditure by the household. GDP = Total National Income + Sales Taxes + Depreciation + Net Foreign Factor Income. (a) National Income (NNPFc)= Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Fixed Capital Formation + Net Change in Stocks Net Imports Depreciation Net Indirect Tax Net Factor Income to Abroad Call us @ 08069405205, Want to work at Insights IAS? It refers to the sum total of factor . Study of cotton textile industry is a microeconomic study. Estimate net factor income from abroad which is added to Domestic Income to derive National Income. (b) Gross National Disposable Income (GNDI) =NNPFC + Consumption of Fixed Capital + Net IndirectTaxes Net Current Transfers to Abroad = 880-540 Income to Abroad + Consumption of Fixed Capital So, NNPfc = 2100 +(-50) = 2050 (in Arabs) In the question, they asked us to calculate NNPfc, but with income method we get . Also explain, two alternative ways of avoiding the problem. (Delhi 2009), 77. As a result, it provides a more accurate picture of the available resources for consumption or investment. The depreciation accounted for is often referred to as capital consumption allowance and represents the amount needed to replace those depreciated assets. (iii) Scholarship given to Indian students studying in India by a foreign company. Sum up all factor payments made within domestic territory to get Domestic Income (NDP at FC). 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