Solution - Concept of National Income



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National income is the sum of factor incomes accruing to : (Choose the correct alternative)

(a) Nationals

(b) Economic territory

(c) Residents

(d) Both residents and non-residents


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C = 100 + 0.4 Y is the Consumption Function of an economy where C is Consumption Expenditure and Y is National Income. Investment expenditure is 1.100. Calculate

(i) Equilibrium level of National Income.

(ii) Consumption expenditure at equilibrium level of national income.

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Calculate National Income from the following data: crores
(i)Private final consumption expenditure900
(iii)Government final consumption expenditure400
(iv)Net indirect taxes100
(v)Gross domestic capital formation250
(vi)Change in stock50
(vii)Net factor income from abroad(-)40
(viii)Consumption of fixed capital20
(ix)Net imports30
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Find national income and private income:

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(i) Wages and salaries                                                                               1,000

(ii) Net current transfer to abroad                                                                   20

(iii) Net factor income paid to abroad                                                              10

(iv) Profit                                                                                                    400

(v) National debt interest                                                                              120

(vi) Social security contributions by employers                                               100

(vii) Current transfers from government                                                         60

(viii) National income accruing to government                                                150

(ix) Rent                                                                                                     200

(x) Interest                                                                                                 300

(xi) Royalty                                                                                                  50

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i. Expenditure on fertilizers by a farmer.
ii. Purchase of tractor by a farmer.

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Find national income from the following:

Autonomous consumption = Rs100
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Solution for concept: Concept of National Income. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)