Advertisement Remove all ads

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

Advertisement Remove all ads
Advertisement Remove all ads
Advertisement Remove all ads
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
Advertisement Remove all ads

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
  Is there an error in this question or solution?
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×