Given the Following Data, Find the Missing Values of 'Private Final Consumption Expenditure' and 'Operating Surplus'. - Economics

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Answer in Brief

Given the following data, find the missing values of 'Private Final Consumption Expenditure' and 'Operating Surplus'.

S.No. Particulars Amount
(In ₹ crores)
(i) National Income 50,000
(ii) Net Indirect Taxes 1,000
(iii) Private Final Consumption Expenditure ?
(iv) Gross Domestic Capital Formation 17,000
(v) Profits 1,000
(vi) Government Final Consumption Expenditure 12,500
(vii) Wages & Salaries 20,000
(viii) Consumption of Fixed Capital 700
(ix) Mixed Income of Self Employed 13,000
(x) Operating Surplus ?
(xi) Net Factor Income from Abroad 500
(xii) Net Exports 2,000
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Solution

National Income (NNPFC) = 50,000
We know,
NNPFC = GDPMP - Consumption of Fixed Capital - NIT + NFIA
50,000 = GDPMP - 700 - 1,000 + 500
GDPMP = 51,200
Now, we know as per the expenditure method:
GDPMP = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Consumption Expenditure + Net Exports
51,200 = P + 12,500 + 17,000 + 2,000
Private Final Consumption Expenditure = ₹ 19,700

Now, NNPFC = NDPFC + NFIA
50,000 = NDPFC + 500
NDPFC = 45,500
Also, 
NDPFC = Wages and Salaries + Operating Surplus + Mixed Income
45,500 = 20,000 + OS + 13,000 
OS = 12,500
So, operating surplus is equal to ₹ 12,500.

Concept: Aggregate Demand and Its Components - Investment
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2018-2019 (March) Delhi Set 2

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