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The document discusses various methods for calculating national income, including the Value Added Method, Income Method, and Expenditure Method. It outlines how to measure national income through the sum of factor incomes, final consumption expenditures, and gross value added, while also providing examples and numerical practices. Additionally, it highlights the importance of avoiding double counting in the measurement process.
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Meruons oF Gitta
Natzowa. Tveome
We laow Hat Nasi
E Onal Greome cis a
Canportant uasure uaa
To. taeatat ov wath Pants oh ony echo.
Povoduction Gives vise
Dacome
bo Drcome, cuhun people
do Expendiwa and ” Expenditvn again
Qerrabr Tome » Dus cho this ue
metwods of Caluusating. National Prona 2-
4) Vala Added Method > Summ ef ott the
CProiuch Meta) AdtiHion by" each - aii
LEbEP S214 222777
,
BD Drcome Metnod-> Sum of ait tae Paotor cincones
ca earned Pin any conor
5) Expensitos Metiod > Sam of alt x expat
tin On croup»
TETTL
Lets Diseum each dim dafall ..4) Vawe Avpeo Merwod 7
* Meosuus National Dreoma tin der 4
Jods. iu 7 ¢ a
v tt Addition by each fcdcing unlit
Volar adali tion eae tacdl ery dnd
to added to get National Pwode
® Otley name 7 Product Metriod
Sy Trduobial onigin method
Net output Meiod
Volut Addd = Value oi Prtermadiats
Oukput Consumplion
OU tet Volar Addition ;
QDPap - So we non ie ot obtain
Gross Value Addl ap =
ou Vatu
Co :
podaing wll
— Diberndiods
Comsumption
GPP np ae
How,
Vale of = Solty + A Stock
Output
(@) Stock = Casing opening
a Sal» 40 Household secloy. Sto)
Sale Solin do Goverment sector | Sty, cin Domuatic
GB EL Mecaty
Somitinus, Solu = ela x Quaubiy ery
PIULUU CULL EL Ube ebopeoveeee===Prteymadian > Purdhan eb tio matinials
Covsum pH On Pacom domestic Pires
Trurnadia 9 Faports
Puvchares
Glen den iF us considuud ay TO
Ethers woo value of, won Pactor dnpals
Also Jiven somelinny as
lL CL, Purchan of saws matrwals cis
: Single-vse Baoducer ges
So, By Valuz added Metnod we get GDPas me
New,
AHO n 7 i Nat -N.T
Naeoret (NWiFae) = GDR, Depmcaion +NBCA-N-ET
Y Rewaudions of Volt Added Meduod
0 Dilermediate Goods value de nok Ganclacled
+ Second hand gow valur fn nok dake, -
+ Sef Comumplion ef Goody da tupdlucle -
Ex: Covsumption of *ebheat by Farmer
a Producing chia “cull! be Ladle +
+ Sug-Coreumplion of Sarviad i» wot dasdludd
On ty madut value do wiry hand bo Find.
Dmputid “Fant of owner occupied howe da
dndadad .Example of, Value Addition
9 eae)
t ey
Vole 0co-0 2500-000 aos es
Addin, =F lo00 ee
2 500
Totel Valun Sdditi® = 1000 + 1500 + S00
VA = 3000
Ut ds eqyal do value
C 4 Final! good)
_ aly aie ne ob both Tater
ag Oe ge is ee eae ae
in ee . valus sf) goods
Pecobten aud gevuids Uo tounted
maxt than once
For Ex tye deer volun of Final good = #3009
Cin ebevs) and abo dh te oe 00 oul
F000 ub will cue Doublr Courting.
Sg oO Oe Min mt)
i
» Mong, Gad ut te ted. wi)PUTT ILbbLbLbb bitters
I
Sort Numerical Practice 9, Vee Addl Mettod
ramp 4 Sees Net Value Added atyp Pudm Poll owing.
a b ‘3
G> Saby e co! Vi) Drtooneddiods wee)
(3) Claseg state 25 | owrene °
(ti Opening Stock 15 Tras teks 1S
UY) Sidi tore, — 10 vit) Ramp 5
(v> Depreciation 20 Ik) Exports lo
Solution By Value Addad Metwod
Grip Vale hk. Consumption
QB up
= Salo + astock - Gy Gow.
= 9o + (25-15) ~
GVA up Cc) ele
— fatan 8-05]
Now, ~———_
mp = AVA np — depredation
= 60 ~ 20 = 2 Yo cows
jal. gwliy Sales , buause Beporky ance
8 LTC nok Pavchan of, yaw malerials
Exomplr-2, Coewloe NVA at pe crx ay
Portiulors (EF) ttm = |Solution = ‘
. GVA pup Salis + OStock = TC
Durabl. goods GVA up
(Octe TPe Sb doom * +998°00 = (Re,c00% 168) +200 000 ~Seoon0
fae = 20,00,000-+ 2.60000 — $00000
i> Single Use 1 €5 00000 2 200,000
eee Tees 5: P= FI 200 000
Giiy Units Sold 20,000
(> Pata of each = 100
GvAw
NV Age = QVAyp— Dep* Al-z-7
5 !%09000 ~ Loqooe ~fieepoo ~ 0)
190,000 ~ Logeno — 102.000
(VD Unold eubpat 00,000 INVAe= 2 ie) oom
"
Wo Rar On Production & 109.000 Dep= Vala h FR opaas
Ost ihe
|» Tvcome Metso
© This metal muasiweey National Dreome ay
Sum of Factor dncomes eauud bg a He
Normal Kuridents of a coum oa
© We bane cmdustand tat Paclor
otomts ane Hee Payment made fo Hrs howelold
Sectoy for Huiy
productive seruieuy seal dure
Production phan. « 7
ices Factor Payment Mernop
® oO
“> Distributive Shou Meteod
Tyres Or Factor Incomes
+) Compenation of Enpleyas (CoE) :
Th tis payment made legen bo
Cnrplowees Sie air ial eee
* COE uncludss
D> Wages ond Salaries tin cast
Cuvolucls al Hi mous bem Pits
ikea 1 Satanjen, wages, boul, abe...)
D> Payment oi Kind
oe ely mony benebity Hike
ent Rue oust, Bu wdaical Rell, ete)
> Employes’ Gntribudion 6 Sra Seusity.
CEx, Contribution tp proutdut Purd
by-
D Ketvument Ruston2) Operarzne Surewus
* Troluds dincome Paom property. and
Ont Premera ip
¢ TH umeudss 25
> Kent & Royally.
Cimpubd vu of, summer ocuspied cis
ote tae? da en)
> Diewt
Por Umnding. funds utp busines -
C Dow uot cinctude
2Tnt am bg Govt on public dubts
9Seh pa Conrumery on loam sales)
umphion puny ose «
> Prof
(Rusaxd Por dra serwiens of the enbupsunenr)
BE 2 rporals Rave
~ toed Br —> Diuidund /Pishrituled
SPE NS Rebainad Banuiugs +87
Undisbeibulad pao
3) Maxep Dvcome
° i ty tat dintorme
Hrsir own labour, on
© Pt abo includes incomu Unintor,
Soler pins 4 inept
0 Sepanate Estmaction 7090, casferust, proktt
and vumt cD 17. Ponta thabs col
peed irae2) Operarzne Surewos
+ Drelucts vneome Puom properly. aud
Orbe prrtirenra lip
© Dt dreluder r5
> Kent & Fo
wad er cmp df
Core ath cone gourd
D> Drowt
For ending. finds uo buns
C Dew rok include
7Dnt paid by Govt On public debts
7S pala Conpumers on loa sen)
lumplion punp ore -
> Roft
(Rusard fir tea seruins of the enbupstueuy )
Be Corporate Paro
te wed for —> Dividend (Vishsibuted
3 es
POP Ss Retatnad Bantegs
Undisbuttoudad soft
3) Mexep Lnucome
por
0 Dt i Het intone Sef Employed pewory
ange fale Oam labae, jad ald pid
© Pt abo includes incon 4 unincorporalid
Outer prises
© Separate Estimation wager, Cinfeust, profit
and vamp cio 1. Ponte dats
known ay Mixed Srcome.
OTF dy diuctyy given dn Ouakions
aSo, By Dacoms Metwod
We ger,
NDP ee = Compensation Opevati Mixed
perating
De ie .
Q er on t+ g Droome
(CoB) CE)
Now de caludete National Lreome (WNPee)
NNPee = NDPoe + Net Pastor cinconme Babin
abroad (NEDA)
“Rercaubions af Lrcome Method +.
© Pranofer incomis au wot included «
* Draws canned On sae d= hy cody
Prams ses os sale of Second=hawd goer
Dacor Porm cNegal adiutties |1
adivitien lhe! Huh} and
meee Gains (Iie lotteries) ds
wot Enduded ay then dy no yaluc addition
Commission eamid on puvchare and sale of
Setond-bancl goods So tenduded
© Dicom from sale shan [bowdo/ debenturesMeruop
Soma Numerical Hractia of Luone
Example 4 Cateuats Domestic dream and National Resume
® cing dinfoymalion | in crores
‘om 4 @crwes) iS Pane)
a Wages 10,000 PD Undists bata 200
> Rent 5,080 HD Social Sacuyi Yoo
© Drout ‘ Yoo Conti. by Ereplayen
4 Dividend 3.000 hk) Conporats Base 400
S Mixed Grom Yoo DY New Rector nine 1 000
Solution’. By Grcome Mettrcd
NPPat pe = COG 4 Of 4 Mined discon
Domuotie
= (4
Basra) = (teptes. se) +[ Bens yoosCanorioor ie]
+ Yoo
os es
= 1240 + 9000 + Yoo
NDP ee = £13,200 exoves
National = NDPpe 4 weca
Garcon i:
CNNPpe) = 19800 4 Jo00
NNPpe = 20,800 cyorey
[. Practica Qusstions Puom the book]3) Expenpetuere Metop
© Wis matrod miapunes National Pacome iin Jou
G expenditwu on dhe purehan Prnol goed
and serufes - +
ae : 7 Congumplion
© Pinal Bopendituee deludis PeBee
© Ms0 Lenowm ap 7 Treome Disposal metrod
SS Cone and
umpHow 7) FPrvtstment
ClamiFication of Pinal Expenditure :-
@) Private Final Comumption Experditune
> Dreludis evpenditwu on Rnal goods ava
Seudiers individual , hoveelolds anol
ine — rf private dnotitudiong
(2) Government Final Conaumption Gcpuditurs
Colucive, ConsumphOn Bependitune by Gout
On Defence and Adminishratioar Gruicts and
dius and order «
©) Gross Lrwertment expenditure ov :
Caress Domuabie Capital Fovmalion °-
LH dneluds
a) Gross Demutie Fixed (apitet formation
Th we Rurtur dividid into Hour
Joxiee ! -
i) Bustnens Axed Paveotment
Gi) Rusidential Onotrurchon Snveadment
Howehold
Git) Peabtic Pied Srumbntat by dhs
gevem
rent «
| ngb> Tavenlonay Trvestment-
aie” change un tock daing.
+ QStock = Ciotivg. Stocle - Opening Stock
4) Wet Exports (x=)
"oho conckag’® Mth expends ond dope
"pn at
ar fie
: Oe tit, D
Lepr Ba ey
Silane by suri
Ranetge pou by usidats oun
© Net Exports = Biports og
0,
Fy Expenditua Metiod ue ge
GDP up = "privat be.
\ Canoes Dermustic Pucduct inal + Pinat + Cros 4 Rt
OM ee Sores
(Bree) Cay | Om)
Bfixed + Sy
Now, (Affe . Saicd
NNPot pe = GD Pap - Depreciahion-+ NFIA-N-71
Nakenel Drom)
S
LOELLELLUELELEUUUeU YY y ~~b) Drvenlong Trobe
+ Th says be change un stock during
te yor
eae = Closing Stocle - Opening, Sdocke
4 Net Exports (x- m)
* Dt iy diPfevence betwen Coparts and cing
oe en : ie ee
* Export ane” expenditure bg
pardran of domatic paodsicl (produced ting
genie)
Daporh ae expendibone bg vwatdod ms
Fooulgn puoduds
* Nok Exports = Byoris ~ Tmporbs
iS
= Ey Expendi tune Metod ut get
GDP up = Privat + Gor + Gras 4 Net
Gross 5) Cesmom ae Doves, we
(Bree). ce) Grey | Grn)
Ch Sonny,
| Now,
NNPat eo Z GD Pap ~ Depreiadion+ META N-ET
(National er)Some cmporlank pein about Tnviohment component
Gor vermevical quistions of, Gxpendituar metnod , Paveslment
Cxpenditirr cia Somadi wy hh tak cuir» Tare
Qu poins whic ou sl Sumerbty 2
a) Grass dn game a» Cuor Dai Get
) Gnross Prvesbment 3 Cron Pre + River
: pital Prmatio, Bw (o. tock)
) C08 Breobent = Net Domus
Pred Capilak + Depreciation + dStock
| Brratio n
+ Noter- Depruciation Gs aho an Gnvestment dit,
oud ts a park of GDP ye whi catclialoge
by Bopendiios metuod - Buk uf, Oxoss Pave do
Given dem idk in alsa? addi bo ib
Puseoubions sagan ding. Expenditurs MeHod >
a) Only Pinal Bopoudilwu do inscluchd + Trtermediaty
? easton as be Quoidd.
b>) Expenditue en Second aud goods da wot talen.
> Expenditure SI and bonds fy wot
? Gollnded Tee Il Gpendinne
AY Prawofer Payments arr uot darcluded
©) Expendilwt on cum atiount produch On
da Ga
, lags
ee aie ane Nee rate oeSoma Nuovo Eranpn of Bypditins Hedhod
Broom Caleulate NDPappe and GMPat mp Fuom dhe
s= Mowing. clade :-
Particulars ( over)
UC) Didioect Dares Ro
© ‘vas Pred Cosh 250
did Nep Baetor coma Puon, 15
®) Govt. Frat COndumpl 6 So
dita
(oD Comumption ob Fired Capital
(id. Net a 3s
Wily Subsidies re
(Uiiiy Net domutic Capilal Brmatlon 30
Selon By Exponditwu Method .
& lo
GDRatmp = PRE + Gecet Net | + Depreciation Nef
Capital Pormabon,
= 250 + So + Fo +254 63/0
GDPasp = = 345 crore,
Now,
NDPat pe = GDPap — Depudation — ne WO
= 845 ~ 25 ~ (20~J0) [2 Sebi)
x 845 QF -lo
NDPpp = Blo crores
GNPup 2 GDPup + NFA
GNuPup = 847 +15 = = 360 core
C Practice more quistions Prom de Book)
—_———