[3-4 Marks]

In case of some it may even fall. [CBSE Sample Paper 2016] OR

PreserveArticles.com: Preserving Your Articles for Eternity. 4.

GNI, or Gross National Income, and GDP, or Gross Domestic Product, are economic terms that deal with National income. Gross National Product is always less than Gross National expenditure. (c) more than national income

Ans:There are two factors, 6. There are many goods and services which are left out of estimation of national income on account of practical estimation difficulties e.g., services of housewives and other members, own account production, etc. Mention the three methods of measuring national income.

Ans: False: Real GDP is taken at some constant prices.

How can the problem of double counting be avoided? Ans: National Income (or NNPFC) = GDPmp- Depreciation + Net factor income from abroad – [Indirect Taxes-Subsides] 850 = 1100 – Depreciation +100- 150 From the following data, calculate Personal Income and Personal Disposable Income. Ans: Value added method is the method that measures the national income by estimating the value added by each producing enterprises within the domestic territory of the country in an accounting year. (a) household sector only

148 = NNPFC-(5+ 15) + 16 + 2+ 10

Personal income does not include income from personal taxes. Ans: False: Exports are made from domestic production. 200 = Personal income – 30 – 5 Personal Income = 235 Arab Private Income = Personal Income + Retained profits (Savings of private corporate sector) + Corporate Tax = 235 + (iii) + (ii) = 800 + 450 = 1250 Crore Note: Gross domestic capital formation = Net fixed capital formation + Depreciation + Change in stock (vii) = (viii) + Depreciation + (ix)

The Personal Disposable Income of the households is Rs 1,200 crores.

(a) equal to national income VALUE BASED QUESTIONS rent. Of the remaining Rs 450, Raju pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment.

So, if we depend only on GDP, we would be underestimating economic welfare. The significant differences between GDP and GNP are discussed in this article excerpt. Differentiate between Gross Domestic Product at Market Price Vs National Income. Why comparing the GDPs of various nations might not tell you which nation is better off? Rent received by an American from Reliance Industries with respect to building located in India will neither be included in national income nor in domestic income of India. Ans: It is the sector that produces goods by exploiting natural resources like land, water, forests, mines, etc. © National income is the sum total of income of the factors earned in lieu of productive services. But personal income includes both factor income and transfer receipts.

What is the value of transfer payments made by the government and firms to the households? 15. It refers to changes in the stock of inventories that have occurred in an unexpected way.

It is included in profit and individual income. Demand for final consumption arises in ——————-. But it is a part of personal income. (b) government enterprises only

Ans: (a), 11. 3. Theoretically to avoid double counting there may be two alternative ways: IV. Calculate (a) Private Income and (b) National Income: Budget Deficit = G – T. (a) payments accruing to factors of production [1 Mark]

Ans: 9. (c) If national income rises, welfare of the people must rise. Distinguish between personal disposable income tax and National disposable income. (b) compensation to employees (c) Imputed rent of an owner occupied a building .

(i) = Personal Income -(v)- (iii) [CBSE Sample Paper 2016]

[CBSE Foreign 2010]

13. 1.

Content Guidelines [1 Mark] (a) Free uniforms to defense personnel

Define ‘depreciation’. [3 Marks] 10.

The factories are not required to pay anything for harming people. Trade Deficit = M – X Ans: False: Gross national product is always equal to gross national expenditure. Rakesh pays Rs 1,000 towards premium on his full life policy with the LIC.

= 235 + 10 + 20 = 265 Arab „ Private income = NNPFC – Income from Domestic Product Accruing to Public Sector (Income from Property and Entrepreneurship accruing to government Administrative Departments + Saving of Non Departmental Enterprises) + National Debt interest + Current transfers from Government + Net Current transfers from rest of the world , Ans: Per Capita Real GDP can be taken as indicator for economy. Ans: 5. It is a part of national income.


Ans: The well being of nation or standard of living of people is measured by per capita income (GDP / Total Population) and distribution pattern of income not only by GDP. Note: It must be noted that NFIA is zero in a closed economy as such economy does not deal with the rest of the world sector. NDPFC = Compensation of employees (Wages and salaries + Employer’s contribution towards social security scheme) + Operating Surplus + Mixed Income, GDPMP = Government final consumption expenditure (Public final consumption expenditure) + Private final consumption expenditure + Gross domestic Capital formation + Net export (Export – Import), Rise in price level Value : Social awareness.

All people do not earn the same amount of income.

(d) Scholarships given to the students of scheduled caste What is the difference between planned and unplanned inventory accumulation? Ans:Real per capita income cannot be taken as an index of economic welfare because there are many items and transactions relating to national income that have no connection with real GDP such as production of defence goods. Ans:  (a), 4. Ans: To avoid the problem of double counting. In a single day Raju, the barber, collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50.

300 = 200 + Depreciation + 50 Depreciation = 300 – 250 = 50 GDPFC = NDPFC + Depriciation = 1250 + 50 = 1300 Crore (b) GNPMP = GDPFC + NFIA (Factor income from abroad – Factor income paid to abroad) + Net indirect tax (iv) = 1300 + [(x) – Factor income paid to abroad] + (xi) Identify the item which is not a factor payment: Distinguish between national income at current prices and national income at constant prices?

Ans: False: Travelling allowances are paid by an employee and then recovered from employer. Ans: (c), 7. [6 Marks] 25. Ans:  GDPMP = Government final consumption expenditure+Private final consumption expenditure + Gross domestic Capital formation (Net domestic Fixed capital formation + consumption of fixed capital + Change in stocks (closing stock – opening Stock) + Net Export = (vi) + (ii) + {(ix) + (vii) + [(iv) – (i)]} + (-viii) = 300+ 1000+ {150+ 30 + [40-50]}+ (-20) = 300 + 1000 + 170 – 20 = 1450 Arab GNPMP = GDPMP + Net factor income from abroad = 1450 + (-v) Define tertiary sector. (c) industry of origin method 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, 1. Exports are a part of net factor income from abroad. Gross national product (GNP) is an economic statistic that includes GDP, plus any income earned by a residents from overseas investments, minus income … 120 = Personal income – 15 – 4 Personal Income =139 Arab (Billion) Private Income = Personal Income + Undistributed profits of private sector + Corporate Tax = 139 + (vii) + (vi) = 800 + 800 = 1600 Crore GNPFC = NDPFC + Depreciation (Consumption of fixed Capital) + Net factor Income from abroad = 1600 + (vii) + (x)

Explain. This follows from the simple idea that the revenues earned by all the firms put together must be distributed among the factors of production as salaries, wages, profits, interests earning and rents. (b) Salaries to the members of Parliament differences, national, personal, Income.

In which type of economy, domestic income will be equal to national income? There are no interest payments made by the households to the firms / government, or by the firms / government to the households. 7. Exports do not form a part of domestic factor income. Ans: False: Exports are a part of domestic income. Ans: False: GDPMP does not include net factor income from abroad but includes net indirect taxes. Ans:  Disposable Income = 30,000 – (10% of 30,000) = ?27,000.

The given set of prices which is used for finding out real per capita income, should change frequently.

Ans: True: It can happen when NFIA is negative i.e., factor income paid to abroad is more than factor income received from abroad. Ans: 100% – 65% = 35% (assuming mixed income is zero).

(a) GDP at market price = GDP at factor cost plus net indirect taxes.

(b) government sector only

National disposable income includes current transfers income of government.

Calculate the disposable income, if personal income is Rs 30,000 and the rate of income tax is 10%.

Discuss any two differences between GDP at constant prices and GDP at current Prices.

Did the price level rise between the base year and the year under consideration? Explain how ‘distribution of gross domestic product’ is a limitation in taking domestic product as an index of welfare.

Suppose the GDP at market price of a country in a particular year was Rs 1,100 crores. Nominal and Real GDP - Measuring Real National Income Nominal income measures income at current prices with no adjustment for the effects of inflation e.g.

(d) value of output minus depreciation III. (d) None of them

Depreciation = 1100+ 100- 150-850 Depreciation = Rs 200 Crore, 6.

Ans: Personal Disposable Income =Personal Income – Direct Taxes paid by households – Miscellaneous receipts of Government

The GNI and GDP are often considered to be the opposite sides of the same coin. 3.

No, the price level did not rise between the base year and the year under consideration. 5. (a) current transfers from the rest of the world [3-4 Marks]

Or Explain any two factors responsible for it.

Ans: It is known as service sector also.

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