Difference between gross and net investments

Define national income. or Define national product.

NNP fc (net national product at factor cost) is known as National Income or national product because it refers to the net money value of all the final goods and services produced in a country by its normal residents during a one-year period of time.

From the following data, calculate Personal Income and Personal Disposable Income. Particulars Rs (crore) (a) Net Domestic Product at factor cost 8 , 000 (b) Net Factor Income from abroad 200 (c) Undisbursed Profit 1 , 000 (d) Corporate Tax 500 (e) Interest Received by Households 1 , 500 (f) Interest Paid by Households 1 , 200 (g) Transfer Income 300 (h) Personal Tax 500

Personal Income = NDP FC + Net factor income from abroad (NFIA) + Transfer Income − Undistributed profit − corporate tax − Net interest paid by households NDP FC = Rs. 8000 crores NFIA = Rs. 200 crores Transfer Income = Rs. 300 crores Undistributed profit = Rs. 1 , 000 crores Corporate tax = Rs. 500 crores Net interest paid by households = Interest paid − Interest received = 1200 − 1500 = ( − ) R s . 300 crores So, putting the values in the above formula PI = 8000 + 200 + 300 − 1000 − 500 − ( − 300 ) = 8000 + 200 + 300 − 1000 − 500 + 300 ⇒ PI = 7300 So, Personal Income = Rs. 7300 crores. Personal Disposable income = Personal Income − Personal Payments = 7300 − 500 = Rs. 6800 crores.

HARD

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Identify the types of investments.

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Important Questions on National Income Accounting

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Why is gross domestic product at factor cost more than the net domestic product at factor cost?

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

National Income=NDP_fc+ _____.

MEDIUM

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

National income includes only _____ goods.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

From the following compute GNP_mp. GDP_fc= Rs.

3000

; NFIA=

R s . 200

. Indirect taxes=

R s . 420

, Subsidies=

R s . 240 .

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

If economic subsidies are added to and indirect taxes are subtracted from the national income at market prices, then it will be equal to:

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Domestic product includes contribution of only resident producers with in the domestic territory of the country.

MEDIUM

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Distinguish between domestic product and national product.

HARD

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

In a single day Raju, the barber, collects

Rs 500

from haircuts; over this day, his equipment depreciates in value by

Rs 50

. 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. He further pays

Rs 20

as income tax from his income. Based on this information, complete Raju's contribution to the following measures of income (a) Gross Domestic Product (b) NNP at market price (c) NNP at factor cost (d) Personal income (e) Personal disposable income.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Out of the following, which aggregate represents national income.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

In a closed economy, gross domestic product is always equal to gross national product.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

What adjustments should be made to make NNP_fc =GDP_mp_.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

GNP exceeds NNP by:

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

NNP_fc is also known as_____ income.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Define national income.

Define national product.

HARD

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Net National Product at Factor Cost of a particular country in a year is

Rs 1, 900

crores. There are no interest payments made by the households to the firms/government, or by the firms/government to the households. The Personal Disposable Income of the households is

Rs 1, 200

crores. The personal income taxes paid by them is

Rs 600

crores and the value of retained earnings of the firms and government is valued at

Rs 200

crores. What is the value of transfer payments made by the government and firms to the households?

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

GDP_mp , GDP_fc_____and NDP_fcare four Domestic concepts.

HARD

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.

HARD

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

From the following data, calculate Personal Income and Personal Disposable Income.

Particulars		Rs (crore)
(a)	Net Domestic Product at factor cost	$8, 000$
(b)	Net Factor Income from abroad	$200$
(c)	Undisbursed Profit	$1, 000$
(d)	Corporate Tax	$500$
(e)	Interest Received by Households	$1, 500$
(f)	Interest Paid by Households	$1, 200$
(g)	Transfer Income	$300$
(h)	Personal Tax	$500$

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

GNP_mp _____, NNP_mpand NNP_fcare four National concepts.

EASY

Economics>Macroeconomics>National Income Accounting>Basic Concepts of Macroeconomics

GNP_fc is equal to NNP_fc when:

Identify the types of investments.

Important Questions on National Income Accounting

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