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National Income Calculation Answer Key

The document provides answers to National Income calculation questions, detailing methods to compute Net National Product at Market Price (NNP at MP) and Gross Domestic Product at Factor Cost (GDP at FC). It includes specific calculations for various components such as wages, rents, and indirect taxes, leading to final values of NNP at MP as ₹19,540 crore and GDP at FC as ₹19,300 crore. Additionally, it outlines the value added/output method and income method for calculating national income.

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Aakriti Bansal
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17 views4 pages

National Income Calculation Answer Key

The document provides answers to National Income calculation questions, detailing methods to compute Net National Product at Market Price (NNP at MP) and Gross Domestic Product at Factor Cost (GDP at FC). It includes specific calculations for various components such as wages, rents, and indirect taxes, leading to final values of NNP at MP as ₹19,540 crore and GDP at FC as ₹19,300 crore. Additionally, it outlines the value added/output method and income method for calculating national income.

Uploaded by

Aakriti Bansal
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Answer key for National Income sums:

Question 10:

` Answer:

(i) Value added / output Method NVAFC


= value of output − Intermediate consumption – depreciation − Net indirect tax NVAFC
= 2500 – 1300 – 160 –(180-40)
= ₹ 900 cr. NNPFC
= 900 + (-30)
= ₹ 870 Cr.

(ii) Income Method: NDPFC = COE + OS + MI

COE = wages + salaries + employer’s contribution to social security COE = 340 + 30 = 370
OS = R + I + Profit
OS = 110 + 10 + 50 = 170
MI = 360
NDPFC = 370 + 170 + 360 = ₹ 900 cr.
NNPFC = NDPFC + NFIA
900 + (-30)
= ₹ 870 cr.
OR

Find out : (a) Net National Product at Market price, (b) Gross Domestic Product at Factor cost:

S. No Components ( Rs. in crore’s)


1 Rent and interest 12000
2 Wages and Salaries 3600
3 Net Indirect tax 200
4 Corporate tax 240
5 Net Factor income from abroad 140
6 Mixed income 2000
7 Social security contribution by employers 400
8 Depreciation 100
9 Dividend 160
10 Undistributed profit 800
11 Subsidies 40

Answer:

Gross Domestic Product at Market Price (income approach)

Sum factor incomes + depreciation + net indirect taxes:

GDP (MP) = Rent & interest + Wages + Employers’ social contributions +


Mixed income + Depreciation + Corporate tax + Dividends + Undistributed
profit + Net indirect taxes
= 12,000 + 3,600 + 400 + 2,000 + 100 + 240 + 160 + 800 + 200
= 19,500 crore

(a) Net National Product at Market Price (NNP at MP)

NNP at MP = (GDP at MP + Net factor income from abroad) − Depreciation


= 19,500 + 140 − 100
= 19,540 crore

(b) Gross Domestic Product at Factor Cost (GDP at FC)

GDP at FC = GDP at MP − Net indirect taxes


= 19,500 − 200
= 19,300 crore
Final answers

 (a) NNP at Market Price = ₹19,540 crore

 (b) GDP at Factor Cost = ₹19,300 crore

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Question 12:

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