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Answer the following question.
Why is a Production Possibility Curve concave to the origin? Explain.
Concept: Concepts of Production Possibility Frontier
Why does an economic problem arise? Explain.
Concept: Central Problems of an Economy
Distinguish between positive economics and normative economics, with suitable examples.
Concept: Positive and Normative Economics
“The pre-independent India’s occupational structure experienced growing regional variation.”
Justify the above statement with valid explanation.
Concept: Occupational Structure
Find net value added at factor cost:
(Rs lakh)
(i) Durable use producer goods with a life span of 10 years 10
(ii) Single use producer goods 5
iii) Sale 20
(iv) Unsold output produced during the year 2
(v) Taxes on production 1
Concept: Circular Flow of Income and Methods of Calculating National Income
Find national income and private income:
| (Rs crore) | ||
| (i) | Rent | 200 |
| (ii) | Net current transfer to abroad | 10 |
| (iii) | National debt interest | 60 |
| (iv) | Corporate tax | 100 |
| (v) | Composition of employees | 900 |
| (vi) | Current transfers from government | 150 |
| (vii) | Interest | 400 |
| (viii) | Interest | 50 |
| (ix) | Undistributed profits | 250 |
| (x) | Net factor income to abroad | (-)10 |
| (xi) | Income accruing to government | 120 |
Concept: Private Income
Explain the precautions that are taken while estimating additional income by the value-added method.
Concept: Circular Flow of Income and Methods of Calculating National Income
If the Real GDP is Rs400 and Nominal GDP is Rs450, calculate the Price Index (base = 100).
Concept: GDP and Welfare
Calculate National Income and Private Income :
| (Rs crores) | ||
| (i) | Net imports | 5 |
| (ii) | Net domestic capital formation | 15 |
| (iii) | Personal income | 90 |
| (iv) | National debt interest | 10 |
| (v) | Corporate tax | 25 |
| (vi) | Government final consumption expenditure | 20 |
| (vii) | Net factor income to abroad | (−) 5 |
| (viii) | Net indirect tax | 10 |
| (ix) | Undistributed profits | 0 |
| (x) | Private final consumption expenditure | 100 |
Concept: Private Income
From the data given below about an economy, calculate (a) investment expenditure and (b) consumption expenditure.
|
(i) |
Equilibrium level of income |
5,000 |
|
(ii) |
Autonomous consumption |
500 |
|
(iii) |
Marginal propensity to consume |
0.4 |
Concept: Methods of Measurement of National Income >> Expenditure Method
Explain the need for land reforms implemented in the agriculture sector.
Concept: Agriculture
Answer the following question.
What precautions should be taken while estimating national income by value-added method? Explain.
Concept: Circular Flow of Income and Methods of Calculating National Income
Do you agree with the given statement? Give valid reasons in support of your answer.
"Higher Gross Domestic Product (GDP) means greater per capita availability of goods in the economy."
Concept: GDP and Welfare
Define the following: Value Addition
Concept: Circular Flow of Income and Methods of Calculating National Income
Assertion (A): Public goods are those goods and services that are collectively consumed by the public.
Reason (R): Public goods are excludable and rivalrous in nature.
Concept: Factor Cost, Basic Prices and Market Prices
Giving valid reasons explain which of the following will not be included in estimation of National Income of India?
- Purchase of shares of X. Ltd. by an investor in the National Stock Exchange.
- Salaries paid by the French Embassy, New Delhi to the local workers of the housekeeping department.
- Compensation paid by the Government of India to the victims of floods.
Concept: Factor Cost, Basic Prices and Market Prices
Study the following information and compare the Economies of India and Singapore on the grounds of ‘Investment in infrastructure as a percentage of GDP’
| Some Infrastructure in India and other Countries, 2018 | |||||
| Country | Investment* in Infrastructure as a % GDP | Percentage of people using safely managed | Mobile Subscribers/100 People | Consumption of energy (mL tonnes of oil equivalent) | |
| Drinking Water Sources | Sanitation Services | ||||
| China | 44 | 96 | 72 | 115 | 3274 |
| Hong Kong | 22 | 100 | 92 | 259 | 31 |
| India | 30 | 94 | 40 | 87 | 809 |
| South Korea | 31 | 98 | 100 | 130 | 301 |
| Pakistan | 16 | 35 | 64 | 73 | 85 |
| Singapore | 28 | 100 | 100 | 146 | 88 |
| Indonesia | 34 | 87 | 61 | 120 | 186 |
Sources: World Development Indicators 2019, World Bank website: www.worldbank.org.; BP Statistical Review of World Energy 2019. 69th Edition.
Note: (*) refers to Gross Capital Formation.
Concept: Factor Cost, Basic Prices and Market Prices
Explain how ‘Non-Monetary Exchanges’ impact the use of Gross Domestic Product as an index of economic welfare.
Concept: GDP and Welfare
Distinguish between ‘Value of Output’ and ‘Value Added’.
Concept: Circular Flow of Income and Methods of Calculating National Income
Read the following figure carefully and choose the correct pair from the alternatives given below:
Concept: Methods of Measurement of National Income >> Income Method
