1 Macro national income all the national income things is given in this 1.pptx

1 Macro national income all the national income things is given in this 1

1. 1 Golden Rule Gross – Depreciation = Net Factor Cost + Net Indirect Taxes = Market Price (Indirect taxes- Subsidies) Domestics + NFIA (FIFA – FITA) = National MAGIC TRICKS

2. 2 Value Added Method: V alue of output (Sales + Change in stock/ closing - opening stock) (-) I ntermediate Consumption = G DP MP / GVA MP MAGIC TRICKS

3. 3 From the following data , calculate gross value added at factor cost by it : Particulars ( (in thousands) (i) Sales 500 (ii) Opening stock 30 (iii) Closing stock 20 (iv) Purchase of intermediate products 300 (v) Purchase of machinery 150 (vi) Subsidy 40 Ans. Gross Value Added at Factor Cost = Sales + (Closing stock – Opening stock) – Purchase of intermediate products + Subsidy = 500 + (20 – 30) – 300 + 40 = Rs. 230 thousands Value Added

4. 4 From the following data relating to a firm, calculate its net value added at factor cost : Particulars ` (in Lakhs) Subsidy 40 Sales 800 Depreciation 30 Exports 100 Closing stock 20 Opening stock 50 Intermediate purchases 500 Purchase of machinery for own use 200 Import of raw material 60 Ans. Net Value Added at Factor Cost = Sales + Closing stock – opening stock – IC – Dep. - NIT (I.Tax – Subsidies) = 800 + 20 – 50 – 500 – 30 + 40 = 280 Lakhs Value Added

5. 5 Calculate ‘intermediate consumption’ from the following date : Particulars ( in lakhs) Value of output 200 Net value added at factor cost 80 Sales tax/ GST 15 Subsidy 5 Depreciation 20 Ans. NVA FC = Value of Output – IC – Depreciation – (Sales tax – Subsidy) 80 = 200 – Intermediate Consumption – 20 – (15 – 5) 80 = 170 - IC IC = 90 Lakhs Value Added

6. 6 Calculate value of output from the following data : Particulars (in lakhs) Net value added at factor cost 100 Intermediate consumption 75 Excise duty 20 Subsidy 5 Depreciation 10 Ans. NVA FC = Value of Output - Intermediate consumption - Depreciation - NIT (Excise duty – Subsidy) 100 = Value of Output - 75 - 10 - (20 – 5) 100 = Value of Output – 100 Value of Output = 200 lakhs Value Added

7. 7 Calculate Gross Value Added at Factor Cost: S. No. Items (Rs. in lakh) 1. Units of output sold (units) 1,000 2. Price per unit of output 30 3. Depreciation 1,000 4. Intermediate cost 12,000 5. Closing stock 3,000 6. Opening stock 2,000 7. Excise (X) 2,500 8. Sales tax 3,500 Ans. GVA FC = (Units × Price) - IC + (Closing stock - opening stock) - (IT - Subsidies) GVA FC = (1,000 × 30) - 12,000 + 3,000 - 2,000 - 2,500 - 3,500 = 30,000 + 3,000 - (20,000) = Rs. 13,000 lakh . Value Added

8. 8 An economy has only two firms A and B. On the basis of the following information about these firms, find out: (a) Value added by firms A and B (b) GDP at market prices. S. No. Items Rs. in lakh) 1. Exports by Firm A 20 2. Imports by Firm A 50 3. Sales to Households by Firm A 90 4. Sales to Firm B by Firm A 40 5. Sales to Firm A by Firm B 30 6. Sales to Households by Firm B 60 Ans. Value added by Firm A = Exports by Firm A + Sales to Firm B + Sales to Households - Imports by Firm A - Sales to Firm A by Firm B = 20 + 40 + 90-50-30 = Rs. 70 lakh. Value added by Firm B = Sales to Firm A + Sales to Households - Sales to Firm B by Firm A = 30 + 60 - 40 = Rs. 50 lakh. GDP at market prices = Value added by Firm A + Value added by Firm B = 70 + 50 = Rs. 120 lakh. Value Added

9. 9 Find out the value added by the industry of origin method and value of national product: (i) Industry A sells raw materials worth Rs. 200 to Industry B. (ii) Industry B sells the processed goods to Industry C for Rs. 300. (iii) Industry C sells goods of Rs. 400 for private consumption. Ans. Transaction Value of Output Cost of IC Value Added A to B 200 - 200 B to C 300 200 100 C to HH 400 300 100 Total 900 500 400 Gross value of output = Rs. 900 Total cost of intermediate goods = Rs. 500 Gross value added = Value of National Product = Rs. 400 . Value Added

10. 10 Find out the value added by the industry of origin and value of national product: (i) Industry A sells for Rs. 600 its semi-finished goods to Industry B, and Rs. 400 to Industry C. (ii) Industry B sells the finished goods for Rs. 500 for private consumption to household and for Rs. 300 to Industry C. (iii) Industry C sells for Rs. 800 for private consumption to households. Ans. Transaction Value of Output (Rs.) Cost of IC(Rs.) Value Added (Rs.) A to B 600 - 1,000 A to C 400   B to HH 500 600 (from A) 200 B to C 300     C to HH 800 400 (from A) 100   300 (from C)   Total 2,600 1,300 1,300 ∴ Gross value of output = Rs. 2,600 Total Cost of intermediate goods = Rs. 1,300 Gross value added = Value of national product = Rs. 1,300 Value Added

11. 11 Q1 Calculate value of output from the following data : Subsidy = 10 Intermediate consumption = 150 Net addition to stocks = (-) 13 Depreciation = 30 Excise duty = 20 Net value added at factor cost = 250 Ans. 440 Value Added

12. 12 Q2 Calculate Sales from the following data : Net value added at factor cost = 300 Net addition to stocks = (-) 20 Sales tax = 30 Depreciation = 10 Intermediate consumption = 100 Subsidy = 5 Ans. 455 Value Added

13. 13 Q3. Calculate intermediate consumption from the following data ; Value of output = 600 Net value added at factor cost = 240 Sales tax = 45 Subsidy = 15 Depreciation = 60 Ans. 270 Value Added

14. 14 Calculate Gross Value added At market Price from the following : Intermediate cost = 8 Closing stock = 5 Sales = 30 Net indirect tax = 6 Subsidy = 1 Depreciation = 3 Opening stock = 4 Ans. 23 Value Added

15. 15 Income Method Income.COM C ompensation of Employees ( wages & salaries + Employer contribution in SSS) + O perating Surplus ( RIP ) Rent & Royalty, Interest, Profit (Undistributed Profit + Corporate tax + Dividend) + M ixed Income = NDP FC MAGIC TRICKS

16. 16 From the following information, calculate operating surplus: S. No. Items (Rs. in crore) 1. Value of gross output at market prices 1,000 2. Net indirect taxes 50 3. Remuneration of workers 300 4. Interest and profits 75 5. Intermediate consumption 375 6. Rent 125 7. Depreciation 75 Ans. Operating Surplus = Rent + Interest + Profit = 125 + 75 = Rs. 200 crore . Income Method

17. 17 Estimate the compensation of employees from the following data: S. No. Items (Rs. in crore) 1. Wages and salaries in cash 528 2. Free housing 162 3. Subsidy on lunch to employees 32 Employer's contribution to social security 28 Compensation received by an injured worker 10 from the insurance company 6. Travelling expenses reimbursement 15 Ans. Compensation of Employees = Wages and Salaries in Cash + Free Housing + Subsidies on lunch + Employers' Contribution to Social Security = Rs. 528 + Rs. 162 + Rs. 32 + Rs. 28 = Rs. 750 crore. Note: Items (5} and (6) are not included in compensation of employees. Income Method

18. 18 On the basis of the information given below, calculate (i) Domestic Income, and (ii) National Income: S. No. Items (Rs. in crore) 1. Rent 5,000 2. Dividend 400 3. Interest 3,000 4. Wages 10,000 5. Mixed income 400 6. Undistributed profit 200 7. Corporate profit tax 400 8. Social security contribution 400 9. Net Factor Income From Abroad 1,000 Ans. (i) Domestic Income = COE + Rent + Interest + Profit + MI (NDP FC ) = (10,000 + 400 )+ 5,000 + 3,000+ 400 + 200 + 400 + 400 = Rs. 19,800 crore . (ii) National Income = Domestic Income + NFIFA (NNP FC ) = Rs. 19,800 + Rs. 1,000 = Rs. 20,800 crore. Income Method

19. 19 From the following, estimate the values of NDP FC and NNP FC (in Rs. crore} S. No. Items (Rs. in crore) 1. Gross National Product at Market Price 2,500 2. Wages and Salaries in Cash 2,000 3. Wages and Salaries in Kind 500 4. Rent 210 5. Royalties 300 6. Corporate Tax 110 7. Mixed Income of Self-employed 450 8. Interest 140 9. Undistributed Profits 120 10. Dividends 50 11. Net Indirect Taxes 30 12. Depreciation 45 Ans. (i) NDP FC = COE + Rent + Royalties + Interest + Profit + MI = 2,500 + 210 + 300 + 140 + 110 + 120 + 50 + 450 = Rs. 3,880 crore. (ii) NNP FC = NDP FC + NFIFA = 3,880 + NFIFA = 3,880+ (- 1,455) = Rs. 2,425 crore . Calculation of NFIFA: GNP MP = NDP FC + Depreciation + NFIFA + NIT 2,500 = 3,880 + 45 + NFIFA + 30 [NFIFA = 2,500 - 3,880 – 45 – 30 = (-) Rs. 1,455 crore .] Income Method

20. 20 Calculate GNP FC by income method. S. No. Items (Rs. in crore) 1. Compensation of employees 70,000 2. Consumption of fixed capital 40,000 3. Subsidies 9,000 4. Net factor income from abroad {-)5,000 5. Operating Surplus 50,000 6. Indirect taxes 10,000 7. Mixed income of self-employed 90,000 Hint. GNP FC = COE + O + M + Dep. + NFIA =(1) + (5) + (7) + (2) + (4) = 70,000 + 90,000 + 50,000 + 40,000 + (-5,000) = Rs. 2,45,000 crore. Income Method

21. 21 “Pandit G Good Night” P rivate Final Consumption Expenditure + G ovt. Final Consumption Expenditure + G ross Domestic Capital Formation ( Net Domestic Fixed Capital Formation + Change in stock + Dep.) + N et Export ( X – IM ) = GDP MP Expenditure Method

22. 22 Find out the national income: S. No. Items (Rs. in crore) 1. Factor income from abroad 15 2. Private final consumption expenditure 600 3. Consumption of fixed capital 50 4. Government final consumption expenditure 200 5. Net current transfers to abroad (-)5 6. Net domestic fixed capital formation 110 7. Net factor income to abroad 10 8. Net imports (-)20 9. Net indirect tax 70 10. Change in stocks (-)10 Hint. NNP FC = PFCE + GFCE + NDF X CF + ∆S + (X - M) + NFIFA – NIT = (2) + (4) + (6) + (10) - (8) - (7) - (9) = 600 + 200 + 110 + (-10) - (-20) - (10) – 70 = 910 - 10 + 20 – 10 – 70 = Rs. 840 crore. Expenditure Method

23. 23 “ Calculate National Income from the following data: S. No. Items (Rs. in crore) 1. Private final consumption expenditure 900 2. Profit 100 3. Government final consumption expenditure 400 4. Net indirect taxes 100 5. Gross domestic capital formation 250 6. Change in stock 50 7. Net factor income from abroad (-)40 8. Consumption of fixed capital 20 9. Net imports 30 Ans. NNP FC = (1) + (3) + (5) - (9) - (8) - (4) + (7) NNP FC = 900 + 400 + 250-30-20-100+ (-40) = Rs. 1,360 crore. Expenditure Method

24. 24 . Calculate NNP FC and NNP MP from the following: S. No. Items (Rs. in Arab) 1. Net change in stocks 50 2. Government final consumption expenditure 100 3. Net current transfers to abroad 30 4. Gross domestic fixed capital formation 200 5. Private final consumption expenditure 500 6. Net imports 40 7. Depreciation 70 8. Net factor income to abroad (-)10 9. Net indirect tax 120 Ans. NNP FC = (2) + (4) + (5) - (6) - (7) - (8) + (1) - (9) NNP FC = 100 + 200 + 500-40 - 70 - (-10) + 50 – 120 = Rs. 630 Arab. Expenditure Method

25. 25 Calculate NDP at Factor Cost by Income and Output method from the following data: S. No. Items (Rs. in crore) 1. Value of output 800 2. Value of intermediate consumption 400 3. Subsidies 10 4. Indirect taxes 60 5. Factor Income received from abroad 10 6. Factor Income paid abroad 20 7. Mixed Income of self-employed 120 8. Rent and Royalty 40 9. Interest and Profit 20 10. Wages and Salaries 110 11. Consumption of fixed capital 50 12. Employer's contribution to social security schemes 10 Hint. (i) NDP FC (Income Method) = COE + R + I + P + MI = 120 + 40 + 20+ 120 = Rs. 300 crore. (ii) NDP FC / NVA FC (Output Method) = Value of output - Value of IC – Dep. - NIT = (800 - 400) - 50 - (60 - 10) = 400 - 100 = Rs. 300 crore. Income & Output Method

26. 26 Calculate National Income by Income method and Output method from the following data: S. No. Items (Rs. in crore) 1. Value of output of primary sector 1,000 2. Value of output of other sectors 400 3. Raw material purchased by the primary sector 500 4. Raw material purchased by the other sectors 300 5. Factor income received from rest of the world 10 6. Factor income paid to rest of the world 15 7. Depreciation 55 8. indirect Taxes 100 9. Subsidies 20 10. Mixed Income of self-employed 200 11. Compensation of employees 170 12. Rent 40 13. Interest 30 14. Profit 25 Hint. NNP FC = Rs.460 crore Income & Output Method

27. 27 Calculate National Income by Income and Expenditure method. S. No. Items (Rs. in crore) 1. Compensation of employees 5,200 2. Govt. final consumption expenditure 1,500 3. Net Indirect Taxes 1,400 4. Operating surplus 2,000 5. Net Exports (-)400 6. Gross fixed capital formation 2,500 7. Private final consumption expenditure 12,000 8. Change in stocks 400 9. Net factor income from abroad 400 10. Depreciation 1,000 11. Mixed income of self-employed 6,400 Hint. (i) NNP FC (Exp. Method ) = (7) + (2) + (6) + (8) + (5) - (10) + (9) - (3) = 12,000 + 1,500 + 2,500 + 400 + (-400) - 1,000 + (400) - 1,400 = Rs. 14,000 crore. (ii) NNP FC (Income Method ) = (1) + (4) + (11) + (9) = 5,200 + 2,000 + 6,400 + 400 = Rs. 14,000 crore. Income & Expenditure Method

28. 28 Calculate Gross Domestic Product at factor cost by Expenditure and income method. S. No. Items (Rs. in crore) 1. Compensation of employees 170 2. Govt. final consumption expenditure 55 3. Private final consumption expenditure 200 4. Operating surplus 90 5. Gross fixed capital formation 70 6. Change in stock 65 7. Mixed income of self-employed 40 8. Consumption of fixed capital 70 9. Net indirect taxes 10 10. Net exports (-) 10 11. Social security contribution paid by employer 50 Hint. (i) GDP FC (Expenditure Method) = PFCE + GFCE + GF X CF + ∆S + NE - NIT = (3) + (2) + (5) + (6) + (10) - (9) = 200 + 55 + 70 + 65 + (-10) - (10) = Rs. 370 crore. (ii) GDP FC (Income Method) = COE + OS + MISE + Depreciation = (1) + (4) + (7) + (8) = 170 + 90 + 40 + 70 = Rs. 370 crore. Income & Expenditure Method

29. 29 Calculate GDP at market price by income method and NNP FC by expenditure method. S. No. Items (Rs. in crore) 1. Govt. final consumption expenditure 100 2. Interest, rent, and profit 900 3. Royalties 20 4. Gross capital formation 620 5. Change in stock 100 6. Net factor income from abroad (-) 10 7. Subsidies 20 8. Private final consumption expenditure 800 9. Indirect taxes 120 10. Consumption of fixed capital 60 11. Mixed income of self-employed 60 12. Compensation of employees 370 13. Net exports (-) 10 Hint. (i) GDP MP (Income Method ) = COE + I,R,P + Royalties + MISE + Depreciation + NIT = 370 + 900 + 20 + 60 + 60 + 020 - 20) = Rs. 1,450 crore. (ii) NNP FC (Expenditure Method ) = (8) + (1) +(4) + (13)-'(10) + (6) - (9 - 7) = 800 +100 + 620 + (-10) - 60 + (-10) - (120 - 20) = Rs. 1,340 crore. Income & Expenditure Method

30. 30 Calculate National Income by income and expenditure method from the data given below: S. No. Items (Rs. in crore) 1. Compensation of employees 49,000 2. Operating surplus 500 3. Private final consumption expenditure 10,000 4. Govt. final consumption expenditure 27,000 5. Net indirect taxes 10,000 6. Net exports 7,000 7. Mixed income of self-employed 500 8. Gross fixed capital formation 10,000 9. Change in stock 7,000 10. Consumption of fixed capital 1,000 11. Net factor income from abroad (-)700 Hint. (i) NNP FC (Income Method ) = (1) + (2) + (7) + (11) = 49,000 + 500 + 500 + (- 700) = Rs. 49,300 crore. (ii) NNP FC (Expenditure Method) = (3) + (4) + (8) + (9) + (6) - (10) + (11) - (5) = 10,000 + 27,000 + 10,000 + 7,000 + 7,000 - 1,000 + (-700) - 10,000 = Rs. 49,300 crore. Income & Expenditure Method

31. 31 . Find out Domestic Income by Expenditure Method and GDP MP by Income Method. S. No. Items (Rs. in crore) 1. Net Factor Income From Abroad (-)10 2. Government final consumption expenditure 220 3. Private final consumption expenditure 1,540 4. Subsidies 30 5. Mixed income of self-employed 860 6. Imports 170 7. Consumption of fixed capital 120 8. Indirect taxes 260 9. Interest, rent and profits 290 10. Compensation of employees 730 11. Exports 140 12. Change in stocks 100 13. Net fixed capital formation 280 Ans. NDP FC by Expenditure Method = PFCE + GFCE + NFCF + Change in stocks + (Exports - Imports) - (Indirect taxes - Subsidies) = 1,540 + 220+ 280+ 100 + 140 - 170 - (260 - 30) = Rs. 1,880 crore. GDP at Market Prices by Income Method = COE + RIP + MI - Subsidies + Indirect taxes + Consumption of fixed capital = 730 + 290 + 860 - 30 + 260 + 120 = Rs. 2,230 crore. Income & Expenditure Method

32. 32 Calculate (i) Gross Domestic Product at Factor Cost and (ii) Factor Income to Abroad: S. No. Items (Rs. in crore) 1. Compensation of employees 800 2. Profits 200 3. Dividends 50 4. Gross national product at market price 1,400 5. Rent 150 6. Interest 100 7. Gross domestic capital formation 300 8. Net fixed capital formation 200 9. Change in stock 50 10. Factor income from abroad 60 11. Net indirect taxes 120 Ans . (i) GDP FC = Compensation of Employees + Profit + Rent + Interest + Depreciation = 800 + 200 + 150 + 100 + Depreciation = 1,250 + Depreciation (1) GDCF = (Net fixed capital formation + Change in stock + Depreciation) 300 = 200 + 50 + Depreciation Depreciation = 300 – 250 = Rs. 50 crore. So GDP FC = 1,250 + Depreciation = 1,250 + 50 = Rs. 1,300 crore. (iii) We know that GNP MP = GDP FC + NFIFA + NIT = GDP FC + (FIFA - FITA) + NIT 1,400 = 1,300 + 60 - FITA + 120 1,400 = 1,480 – FITA FITA = Rs. 80 crore. Income & Expenditure Method

33. 33 From the following data estimate (a) national income by income method and (b) subsidies. Amount in ( ) (i) Rent 6,000 (ii) Net domestic fixed capital formation 15,000 (iii) Employers contribution to social security schemes 3,000 (iv) Profit 10,000 (v) Interest 4,000 (vi) Net factor income paid to abroad 2,000 (vii) Change in stock 5,000 (viii) Government final consumption expenditure 15,000 (ix) Compensation of employees 40,000 (x) Royalty 1,000 (xi) Private final consumption expenditure 32,000 (xii) Indirect taxes 5,000 (xiii) Mixed income of self employed persons 10,000 (xiv) Net imports (-) 5,000 Ans . NNP FC = COE + Operating surplus + MI + NFIA = 40,000 + (6,000 + 1,000 + 4,000 + 10,000) + 10,000 – 2000 = 69,000 Expenditure Method PFCE + GFCE + NDCF + Net exports - Indirect tax + Subsidies + NFIA = NNP FC = 32,000 + 15,000 + (15,000 + 5,000) + 5,000 - 5,000 + Subsidies – 2,000 = 69,000 Subsidies = 4,000 Income & Expenditure Method