ABS VIDHYA MANDHIR

NATIONAL INCOME

1 Mark Questions
Very Short Answer Type Questions (1 Mark)

1. Define stock variable.

Ans. A variable whose value is measured at a point of time.
2. Define capital goods.
Ans. Goods used is producing other goods are called capital goods.
3. What is nominal gross domestic product ?
Ans. When GDP of a given year is estimated on the basis of price of the same year, it is
called nominal GDP.
4. Define flow variables.
Ans. Any variable whose magnitude is measured over a period of time is called a glow
variable.
5. Define ‘real’ gross domestic product.
Ans. When GDP of a given year is estimated on the basis of base year prices it is called
real gross domestic product.
6. Define capital formation.
Ans. Increase in the stock of capital in the given period is called capital formation
7. When is the national income less than domestic income?
Ans. When NFIA is negative.
8. When is the national income larger than domestic factor income?
Ans. When NFIA is positive.
9. What is the effect of an indirect tax and a subsidy, on the price of the commodity?
Ans. The effect of an indirect tax on a commodity is to increase the price and the effect
of subsidy is to reduce the price in the market.
10. Are the wages and salaries received by Indians working in American Embassy
in India a part of Domestic Product of India?
Ans. No, because American embassy is not a part of domestic territory of India.
11. Why is the study of the problem of unemployment in India considered a
macro economic study?
Ans. The problem of unemployment in India is an economic issue at level of economy
as a whole, hence considered as macroeconomic study.
12. When is gross domestic product of an economy equal to gross national product?
Ans. When NFIA is zero.

3-4 Mark Questions

Short Answer Type Questions(3-4 Marks)
1. Will the following be included in gross domestic product / Domestic Income of
India? Give reasons for each answer.
1.Consultation fee received by a doctor.
2.Purchase of new shares of a domestic firm.
3.Profits earned by a foreign bank from its branches in India.
4.Services charges paid to a dealer (broker) in exchange of second hand goods.
 Ans.
1.Yes, It is a factor income. It is his salary.
2.No, It is not included in GDP, because it is a merely financial transaction which
does not help directly in production.
3.Yes, It is a factor income in domestic territory.
4.It is included because it is his factor income (salary).
2. How will you treat the following while estimating domestic product of India? Give
reasons.
1.Rent received by a resident Indian from his property in Singapore.
2.Profits earned by a branch of an American Bank in India.
3.Salaries paid to Koreans working in Indian embassy in Korea.
Ans.
1.It will not be included in domestic product of India as this income is earned
outside the domestic (economic) territory of India.
2.It will be included in domestic product of India as the branch of American bank is
located within the domestic territory of India.
3.It will be a part of domestic product of India because this income is earned within
the domestic territory of India. Indian embassy in Korea is treated as located within
the domestic territory of India.

3. State whether the following is a stock or flow:

(a) Wealth, (b) Cement production, (c) Saving of a household, and (d) Income
of household.
Ans. Stock – (a) & (b), since these are variables measurable at a point of time.
Flow – (c) & (d), since these are variables measurable over period of time.
4. State whether the following is a stock or flow:
(a) National capital, (b) Exports, (c) Capital formation, and (d) Expenditure on
food by households.
Ans. Stock – (a), since national capital is a variable measurable at a point of time.
Flow – (b), (c) & (d), since these are variables measurable over period of time.
5. Are the following included in the estimation of National Income a country?
Give reasons.
1.Bonus received by employees.
2.Government expenditure on defence.
3.Money sent by a worker working abroad to his family.
4.Profit earned by a branch of Indian Bank in London.
Ans.
1.It should be included in NI because it is a part of the compensation of employees (salary in
cash).
2.It should be included in NI because defence service is considered final service so far as it
provides peaceful and secure environment to the citizens.
3.It is included in NI because it is a part of NFIA.
4.It is included in NI of India because it is a part of NFIA.
6. Are the following included in the estimation of National Income a country? Give
reasons.
1.Rent free house to an employee by an employer.
2.Purchases by foreign tourists.
3.Purchase of a truck to carry goods by a production unit.
4.Payment of wealth tax by a household.
 Ans.
1.It should be included in NI because it is a part of the compensation of employees
(salary in kind).
2.It is included in NI because it is a part of the final consumption expenditure on
domestic product.
3.It should be included in NI because it is an addition to the capital stock of the
production unit.
4.It should not be included in NI because it is a compulsory transfer payment and
paid from past savings of the tax payers.

7. Is net export a part of NFIA? Explain.

Ans. No, it is not.Net export, the difference between export and import (X- M), is a part
of expenditure on domestic product. While NFIA is the difference between income
earned from abroad by the normal residents of a country and income earned by non-
residents in the domestic territory of that country. It is not included in the domestic
product rather it is a component of NI. Therefore both are different concepts.

8.Giving reasons classify the following into intermediate products and final products
1.Furniture purchased by a school.
2.Chalk, duster, etc, purchased by a school.
Ans. 1.It is final product because it is purchased for final investment.
2.These are intermediate products because these are taken to be used up completely
during the same year.
9.Giving reasons, explain the treatment assigned to the following which estimating
national income.
1.Family members working free on the farm owned by the family.
2.Payment of interest on borrowings by general government.

Ans.

1.Imputed salaries of these members will be included in national income.

2.It will not be included in national income because it is non-factor payment as
general government borrows only for consumption purpose.

10.Giving reasons, explain the treatment assigned to the following which estimating
national income.

1.Payment of income tax by a firm

2.Festival gifts to employees.

Ans.

1.Not included, as it is transfer payment from firm to government.

2.Not included, as it is transfer payment.

11.Explain the basis of classifying goods into intermediate and final goods. Give
suitable examples.
Ans. Goods which are purchased by a production unit from other production units and
meant for resale or for using up completely during the same year are called intermediate
goods for example : raw material. Goods which are purchased for consumption and
 investment are called final goods for example : Purchase of machinery for installation in
factory.

12.Giving reason classify the following into intermediate and final goods.
1.Machine purchased by a dealer of machine.
2.A car purchased by a house hold.
Ans.
1.It is an intermediate good because it is meant for resale in the market.
2.It is a final good because it is meant for final consumption.

13.How will you treat the following in estimating rational income of India? Give
reasons for your answer.

1.Value of bonus shares received by shareholders of a company.

2.Interest received on loan given to a foreign company in India.
Ans.
1.It is not included in national income because it is the return of financial capital
and not of the goods & services.
2.It is included in the national income as interest is a factor income and a part of
domestic income.

6 Marks Questions

Long Answer Type Questions (6 Marks)

1. How will you treat the following which estimating national income of India? Give
reasons.
1. Dividend received by an Indian from his investment in shares of a foreign
company.
2. Money received by a family in India from relatives working abroad.
3. Interest received on loans given to a friend for purchasing a car.
4. Dividend received by a foreigner from investment in shares of an Indian
company.
5. Profit earned by a branch of an Indian bank in Canada.
6. Scholarship given to Indian students studying in India by a
foreign company.
7. Fees received from students.
8. Profits earned by branch of a foreign bank.
9. Interest paid by an individual on a loan taken to buy a car.
10. Expenditure on machines for installation in a factory.
11. Profit earned by a branch of foreign bank in India.
12. Payment of salaries to its staff by an embassy located in New Delhi.
13. Interest received by an Indian resident from firms abroad.
14. Salaries received by Indians working in branches of foreign banks in India
15. Profits earned by an Indian bank from its branches abroad.
16. Rent paid by embassy of Japan in India to an Indian resident.
17. Imputed rent of self occupied house
18. Interest received on debentures
19. Financial help received for flood victims.

Ans.
 1. It is factor income from abroad so will be included in national income.
2. It is transfer receipts, so it is not included in national income.
3. Not included in national income, because it is a non-factor receipt as loan is not
used for production for consumption
4. Included as it is a factor income to abroad.
5. It is a part of NFIA and will be included in national income.
6. It is transfer receipts, so it is not included in national income.
7. It is included in national income because it is a part of the private final
consumption expenditure of the house hold.
8. Included in national income because it is part of domestic factor income of
India.
9. Not included because it is a non-factor income as loan is not used for production
but for consumption.
10. Included because it results in flow of income throught productive activities
11. Included, because it is a part of domestic product of India.
12. Not included because it is not a part of domestic product of India
13. Included as it is the part of NFIA.
14. Included because it is earned in domestic territory of India.
15. Included because it is aprt of NFIA
16. Included as it is paid to an Indian resident out side the domestic territory of a
country. It will be included in NFIA.
17. Included as a part of rent as it is payment to self for housing services.
18. Included because it is a factor earning
19. Not included as it is a transfer payment.
2. How will you treat the following which estimating domestic factor income of
India? Give reasons.

1.Remittances from non-resident Indian to their families in India

2.Rent paid by the embassy of Japan in India to a resident Indian.
3.Profit earned by branches of foreign bank in India.
4.Payment of salaries to its staff by embassy located in India.
5.Interest received by an Indian resident from firms abroad.

Ans.

1. Not included as it is a transfer payment

2. Not included because Japanese embassy in India does not fall with in the
domestic territory of India.
3. Included because it falls with in the domestic territory of India
4. Not included as an embassy located in India is not fall with in the domestic
territory of India
5. Not included in domestic product but it is the part of NFIA.
2. Are the following part of a country’s net domestic product at market price?
Explain
1. Net indirect tax
2. Net export
3. NFIA
4. Consumption of fixed capital

Ans.
 1.Yes, because market price = factor cost + Net Indirect tax
2.Yes, because NDPMP includes net exports
3.No, because domestic means it excludes NFIA
4.No, net means consumption of fixed capital is excluded.

3. Will the following be included in gross domestic product / Domestic Factor Income
of India? Give reasons for each answer.
1. Old age pension given by govt.
2. Factor income from abroad.
3. Salaries to Indian residents working in American embassy in India.
4. Compensation of employees given to residents of china working in Indian
embassy in China.
5. Profit earned by a company in India, which is owned by a non-resident.
6. Profit earned by an Indian company from its branch in Singapore.

Ans.

1.No, because pension is paid on account of old age of a pensioner and not for his
rendering productive services.
2.No, because factor income is earned not within the domestic territory of a country
but from abroad.
3.No, because American embassy is not a part of domestic territory of India.
4.Yes, because Indian embassy in China is a part of domestic territory of India.
5.Yes, because the company within India’s domestic territory earns profit.
6.No, because the branch is located outside the domestic territory of India.

4. Why are exports included in the estimation of domestic product by the

expenditure method? Can gross domestic product be greater than gross national
product? Explain.(4+2)
Ans. Expenditure method estimates expenditure on domestic product, i.e. expenditure
on final goods and services produced within the economic territory of the country. It
includes expenditure by residents and non- residents both. Exports, though purchased
by nonresidents, are produced within the economic territory, and therefore, a part of
domestic product.
Domestic product can be greater than national product if factor income paid to the rest
of the world is greater than the factor income received from the rest of the world is i.e.
when net-factor income received from abroad is negative.
5. Are the following included in the estimation of National Income of India?
Give reasons for each answer.
1. Profit earned by a foreign company bank in India.
2. Money received from sale of shares.
3. Salary paid to Americans working in Indian embassy in America.
4. Salary paid to Indians working in Indian embassy in America.
5. Scholarship received by a student.
6. Remittances from aboard.

Ans.

1.No, as it is a factor income paid abroad (it is earned by non-residents).

2.No, it is only a transfer of paper claims.
3.No, this factor income belongs to non-residents.
4.Yes, as it is a factor income paid to normal resident of India.
 5.No, it is only a transfer payment.
6.No, it is only a transfer payment. No commodity is sent or services rendered
return for this.

6. Will the following be included National Income? Give reasons for each answer.
1. Services of owner occupied houses.
2. Purchase of new shares of a domestic firm.
3. Purchase of second-hand machine from a domestic firm.
4. Consultancy fee paid to a foreign expert.
5. Commission paid to agent for the sale and purchase of shares.
6. Dividend received on shares.

Ans. 1.Yes, Imputed rent of owner occupied houses will be included in NI.
2.No, because it is a financial transaction which does not help directly in
production.
3.No, because it is not related with current flow of goods and services.
4.No, as it is a factor income paid abroad (it is earned by non-residents).
5.Yes, It is included in NI since it is paid for rendering productive services.
6.Yes, dividends are a part of corporate profit and therefore, include in NI.

7. Will the following be included National Income? Give reasons for each answer.
1. Free Medical facility to employees by the employer.
2. Money received from sale of old house.
3. Government expenditure on street lighting.
4. Interest received by a household from a commercial bank.
5. Receipts from sale of land.
6. Interest on public debt.

Ans.

1.Yes, as it is a supplementary income paid in kind and hence a part of

compensation of employees.
2.No, as it has already been taken into account when the house was constructed.
3.Yes, It is a part of Government final consumption expenditure and it adds to flow
of services.
4.Yes, as it is payment for use of capital.
5.No, as it does not add to flow of goods & services.
6.It should not be included in NI because public debt is a loan taken on to meet
consumption expenditure by the government.

8. Are the following included in the estimation of National Income a country?

Give reasons.
1. Services rendered by family members to each other.
2. Wheat grown by a farmer but used entirely for family’s consumption.
3. Expenditure government on providing free education
4. Payment of fees to a lawyer engaged by a firm.
5. Man of the match award to a player of the Indian cricket team.
6. Payment of the match fee to players of Indian cricket team.

Ans.
 1.Services rendered by family members to each other should not be included in NI
because these are not rendered for the purpose of earning income.
2.Imputed value of self-consumed wheat grown by a farmer must be included in NI,
because it adds in the flow of goods.
3.It should be included in NI because the government expenditure on the free
services is considered as a part of government final consumption expenditure.
4.Yes, as it is factor income against the service of lawyer.
5.It should not be included in NI because it is a windfall gain and it does not add in
the flow of goods and services.
6.It should be included in NI of India because they render productive services as
professionals.

9. Are the following included in the estimation of National Income a country?

Give reasons.
1. Unemployment allowance under NREGA.
2. Indirect tax (Sale tax/excise duty).
3. Salary received by the workers under NREGA.
4. Income tax.
5. Corporation tax.
6. Travelling expenses paid to salesman by the employer.

Ans.

1.It is transfer payment received by those persons who are not employed; therefore
it should not be included in NI.
2.It is not included in NI because it does not add in the flow of goods and services.
3.It is included in NI because it is a factor income.
4.It is a part of compensation of an employee (income). While calculating NI by
income method, compensation of employees is to be included while doing so,
income tax to be paid by them should not be included separately.
5.It is a part of profit of corporate sector. While calculating NI by income method,
profit is to be included while doing so, Corporation tax should not be included
separately.
6.Travel expenses incurred by employees for business purpose which are
reimbursed by the employers are excluded because these are a part of intermediate
consumption of the employers

SUMS RELATED TO VALUE ADDED METHOD

1. On the basis of the following data about an economy
which consists of only two firms, find out:
a) Value Added by firm A and B, and
b) Gross Value Added or Gross Domestic Product at Factor Cost.
Items ₹ in lakhs
i) Sales by firm A 100
ii) Purchases from firm
40
B by Firm A
iii) Purchases from firm A by Firm B 60
iv) Sales by firm B 200
v) Closing Stock of Firm A 20
vi) Closing Stock of Firm B 35
vii) Opening Stock of Firm A 25
viii) Opening Stock of Firm B 45
xi) Indirect taxes paid by both firms 30
2. Calculate:--
a) Gross Value Added at Market Price, and
b) National Income from the following data.
₹ in
Items
lakh
(i) Value of Output:
800
a) Primary Sector
200
b) Secondary Sector
300
c) Tertiary Sector
(ii) Value of Intermediate inputs purchased by:
400
d) Primary Sector
100
e) Secondary Sector
50
f) Tertiary Sector
(iii) Indirect taxes paid by all sectors 50
(iv) Consumption of fixed capital of all sectors 80
(v) Factor income received by the residents from rest of the world 10
(vi) Factor income paid to non-residents 20
(vii) Subsidies received by all sectors 20
3. Find Gross Value Added at Market Price:-
Items (₹ in lakh)
i) Depreciation 20
ii) Domestic Sales 200
iii) Net Change in Stocks (-) 10
iv) Exports 10
120
v) Single use producer goods

4. Find Net Value Added at Market Price:

 (₹ in
Items
lakh)
i) Fixed capital good with a life span of 5 years 15
ii) Raw Materials 6
iii) Sales 25
iv) Net Change in Stock (-) 2
v) Taxes on production 1

5. Find Net Value Added at Factor Cost:-

Items (₹ in lakh)
i) Durable use producer goods with a life span of 10 years 10
ii) Single use producer goods 5
iii) Sales 20
iv) Unsold output produced during the year 2
v) Taxes on production 1

6. Calculate the Net Value Added at Factor Cost:

S.N Items (₹ in lakh)

i) Goods and Service tax 25
ii) Consumption of fixed Capital 5
iii) Closing Stock 10
iv) Corporate tax 15
v) Opening stock 20
vi) Sales 540
vii) Purchase of raw materials 140
7. Calculate the Gross Value Added at Market Price

S.N Items (₹ in lakh)

i) Goods and service tax 40
ii) Consumption of fixed capital 15
iii) Closing stock 20
iv) Sales 700
v) Subsidy 5
vi) Intermediate consumption 400
vii) Opening Stock 10

8. Calculate gross value added at market price.

 (₹
S.N Items
lakh)
i) Goods and service tax 30
ii) Sales 800
iii) Depreciation 50
iv) Net Change in stocks – 40
v) Purchase of raw materials 360
vi) Corporate tax 10
9. From the following data, calculate value added by firm X and
by firm Y:-
S.N Items (₹ lakh)
i) Closing stock of firm X 20
ii) Closing stock of firm Y 15
iii) Opening stock of firm Y 10
iv) Opening stock of firm X 5
v) Sales by firm X 300
vi) Purchases by firm X from firm Y 100
vii) Purchases by firm Y from firm X 80
viii) Sales by firm Y 250
ix) Import of raw material by firm X 50
x) Exports by firm Y 30
10. Calculate Value Added by Firms A and B from the following
data:-
S.N Items (₹ lakh)
i) Purchases by Firm B from Firm A 40
ii) Sales by Firm B 80
iii) Imports by Firm B 10
iv) Rent paid by Firm B 5
v) Opening stock of Firm B 15
vi) Closing Stock of Firm B 20
vii) Purchases by Firm A from Firm B 20
viii) Closing Stock of Firm A 20
ix) Opening Stock of Firm A 10
11. Calculate net value added at factor cost:-

S.N Items (₹ Crore)

i) Subsidies 5
ii) Sales 500
iii) Intermediate Consumption 200
iv) Closing Stock 40
v) Consumption of fixed capital 60
vi) Indirect tax 30
vii) Opening Stock 50
12. From the following information about firm X, calculate gross
value added by it.
S.N Items (₹ lakh)
i) Domestic Sales 300
ii) Exports 100
iii) Production for Self Consumption 50
iv) Purchases from firm A 110
v) Purchases from firm B 70
vi) Imports of raw materials 30
vii) Change in Stock 60
13. From the following data, find out value added by firm X:
S.N Items (₹ lakh)
i) Sales by Firm Y to Firm X 400
ii) Sales by Firm X to households 500
iii) Purchases by firm Z from Firm X 300
iv) Opening stock of firm X 25
v) Closing stock of firm X 75
14. Calculate (a) Value of output and (b) Net Value added at
factor cost from the following data:
S.N Items (₹ lakh)
i) Goods and services tax 100
ii) Sales 1000
iii) Operating Surplus 60
iv) Opening Stock 200
v) Consumption of fixed capital 50
vi) Closing Stock 200
vii) Intermediate cost 600
viii) Subsidies 40
15. Given the following data, find the Net Value Added at Factor
Cost by Farmer producing wheat.

S.N Items (₹ in crore)

i) Sale of wheat by the farmer in the local market 6,80,000
ii) Purchase of a tracter 5,00,000
iii) Procurement of wheat by the government from the farmer 20,000
iv) Consumption of wheat by the farming family during the year 5,000
v) Subsidy 2,000
vi) Expenditure on the maintenance of existing capital stock 10,000
16. Calculate Net Value Added at Factor Cost from the following
data:-
S.N Items (₹ in crore)
i) Purchase of Machinery to be used in the production unit 100
ii) Sales 200
iii) Intermediate Costs 90
iv) Indirect taxes 12
v) Change in stock 10
vi) Excise Duty 6
vii) Stock of Raw Material 5
17. From the following data relating to a firm, calculate its Net
Value Added at Factor Cost:
S.N Items (₹ in lakh)
i) Subsidy 40
ii) Sales 800
iii) Depreciation 30
iv) Exports 100
v) Closing Stock 20
vi) Opening Stock 50
vii) Intermediate purchases 500
viii) Purchase of Machinery for own use 200
ix) Import of raw material 60
18. Calculate Gross Domestic Product at Market Price by
Production Method.
₹
S.N Items
crore
Intermediate consumption of:
a) Primary sector 500
i)
b) Secondary Sector 400
c) Tertiary Sector 300
Value of Output
a) Primary Sector 1000
ii)
b) Secondary Sector 900
c) Tertiary Sector 700
ii) Rent 10
ix) Emoluments of Employees 400
v) Mixed Income 650
vi) Operating Surplus 300
vii) Net Factor Income from abroad – 20
viii) Interest 5
ix) Consumption of fixed capital 40
x) Net Indirect tax 10
19. Calculate Gross Domestic Product at market price from the
following data:-
S.N Items (₹ lakh)
Net Value added at market price by:
a) Primary Sector 700
i)
b) Secondary Sector 1000
c) Tertiary Sector 1000
ii) Net Exports – 10
iii) Net Indirect tax 100
Value of Intermediate consumption in:
a) Primary Sector 200
iv)
b) Secondary Sector 300
c) Tertiary Sector 300
Consumption of fixed capital in:
a) Primary Sector 20
v)
b) Secondary Sector 50
c) Tertiary Sector 30

20. Calculate Net Value Added at factor cost from the following
data:0
Items (₹ in crore)
1. Purchase of machinery to be used in the production unit. 100
2. Sales 200
3. Intermediate costs 90
4. Indirect taxes 12
5. Changes in Stock 10
6. Excise duty 6
7. Stock of Raw Material 5
21. Find NVA at FC from the following.
Items (₹ in crore)
1. Sales 800
2. Taxes on production 50
3. Depreciation 70
4. Opening Stock 100
5. Closing Stock 80
6. Intermediate cost 200
22. Calculate GVA at MP from the following:-

Items (₹ in crore)
1. Purchase by Firm A from Firm B 100
2. Purchase by Firm B from Firm A 150
3. Sales by Firm A 200
4. Sales by Firm B 300
5. Exports by Firm B 30
6. Change in stock of Firm A – 20
7. Change in stock of Firm B 10
23. Calculate national income from the following data. Assume
that there are only two properties, firm A and Firm B in the
economy:
Items (₹ in crore)
1. Purchases of materials, etc. by Firm A from Firm B 20
2. Purchases of materials, etc. by Firm B from Firm A 30
3. Value of output produced by Firm A 100
4. Value of output produced by Firm B 80
5. Payment of indirect tax by Firm A 10
6. Payment of indirect tax by Firm B 5
7. Consumption of fixed capital by Firm B 5
8. Consumption of fixed capital by Firm A 10
9. net change in stocks of Firm A –7
10. Net change in stock of Firm B 7
11. Net factor income from abroad –5
24. Calculate GDP at MP and NDP at FC from the following data.
Assume that there are only two sectors A and B in the economy.
Items (₹ in crore)
1. Closing stock of sector A 20
2. Opening stock of sector B 5
3. Opening stock of sector A 30
4. Closing stock of sector B 15
5. Sales by sector B 200
6. Sales by sector A 150
7. Goods and Services tax paid by section A 15
8. Consumption of fixed capital by sector B 10
9. Consumption of fixed capital by sector A 10
10. Subsidies to sector B 5
11. Intermediate consumption by sector A 70
12. Intermediate consumption by sector B 60
13. Net factor income from abroad 10
25. From the following data, calculate “gross value added at
factor cost.”

Items (₹ in crore)

1. Sales 180

2. Rent 5

3. Subsidies 10
4. Change in stock 15

5. Purchase of raw materials 100

6. Profits 25

26. From the following data, calculate “gross value added at

factor cost.”
Items (₹ in crore)
1. Net indirect tax 20
2. Purchase of intermediate products 120
3. Purchase of machines 3oo
4. Sales 250
5. Consumption of fixed capital 20
6. Change in stock 30
27. Calculate Net Value added at Market Price from the
following data:-
Items (₹ in crore)
1. Depreciation 5
2. Sales 100
3. Opening stock 20
4. Intermediate consumption 70
5. Excise Duty 10
6. Change in stock – 10
28. Calculate Gross Value Added at Factor Cost:-
Items (₹ in crore)
1. Units of output sold (units) 1000
2. Price per unit of output 30
3. Depreciation 1000
4. Intermediate cost 12000
5. Closing stock 3000
6. Opening stock 2000
7. Excise 2500
8. Sales Tax 3500
1 Calculate a) Operating Surplus, and b) Domestic Income;

Items ₹ in Crore

i) Compensation of Employees 2,000

ii) Rent and interest 800

iii) Indirect Taxes 120

iv) Corporation tax 460

v) Consumption of fixed capital 100

vi) Subsidies 20

vii) Dividend 940

viii) Undistributed Profits 300

ix) Net Factor Income to abraod 150

c) Mixed Income 200

2. Calculate National Income

Items (₹ in crore)
i) Compensation of employees 2,000
ii) Profit 800
iii) Rent 300
iv) Interest 250
v) Mixed income of self employed 7000
vi) Net current transfers to abroad 200
vii) Net Exports – 100
viii) Net indirect taxes 1,500
ix) Net Factor income to abroad 60
x) Consumption of fixed capital 120
3. Calculate Net National Product at Market Price:
Items (₹ in thousand crore)
1. Compensation of Employees 250
2. Mixed income of self employed 600
3. Profit 80
4. Rent 30
5. Interest 40
6. Net factor income to abroad – 10
7. Net exports 15
8. Consumption of fixed Capital 20
9. Net indirect taxes 10
10. Net current transfers to abroad 8
4. Calculate National Income:
Items (₹ in crore)
1. Profit 1,000
2. Mixed Income of self employed 15,000
3. Dividends 200
4. Interest 400
5. Compensation of employees 7,000
6. Net factor income to abroad 100
7. consumption of fixed capital 400
8. Net exports – 200
9. Net Indirect taxes 800
10. Net Current transfers to rest of the world 40
11. Rent 500
5. Calculate the Gross National Product at Market Price:
Items (₹ in crore)
1. Compensation of employees 2500
2. Profit 700
3. Mixed income of self employed 7500
4. Government final consumption expenditure 3000
5. Rent 400
6. Interest 350
7. Net factor income from abroad 50
8. Net current transfers to abroad 100
9. Net indirect taxes 150
10. Depreciation 70
11. Net exports 40
6. Calculate the Net National Product at Market Price
Items (₹ in Crore)
1. Mixed income of self Employed 8000
2. Depreciation 200
3. Profit 1000
4. Rent 600
5. Interest 700
6. Compensation of employees 3000
7. Net indirect taxes 500
8. Net factor income to abroad 60
9. Net exports (-) 50
10. Net current transfers to abroad 20
7. Calculate National Income:-
1. Compensation of employees 2000
2. Rent 400
3. Profit 900
4. Dividend 100
5. Interest 500
6. Mixed income of self employed 7000
7. Net factor income to abroad 50
8. Net exports 60
9. Net indirect taxes 300
10. Depreciation 150
11. Net current transfers to abroad 30
8. Find Net National Product at Market Price:
Items (₹ in crore)
 1. Personal taxes 200
2. Wage and Salaries 1200
3. Undistributed Profit 50
4. Rent 300
5. Corporation tax 200
6. Private Income 2000
7. Interest 400
8. Net Indirect tax 300
9. Net factor income to abroad 20
10. Profit 500
11. Social Security contributions by employers 250
9. Find Net Domestic Product at Factor cost:
Items (₹ in crore)
1. Rent 200
2. Net Current transfers to abroad 10
3. National debt interest 60
4. Corporate tax 100
5. Compensation of employees 900
6. Current transfers to government 150
7. Interest 400
8. Undistributed Profits 50
9. Dividend 250
10. Net Factor income to abroad – 10
11. Income accruing to government 120
10. Find National Income:-
Items (₹ in crore)
1. Wages and Salaries 1000
2. Net Current transfers to abroad 20
3. Net Factor income paid to abroad 10
4. Profit 400
5. National debt interest 120
6. Social security contributions by employers 100
7. Current transfers from government 60
8. National income accruing to government 150
9. Rent 200
10. Interest 300
11. Royalty 50
11. Calculate Net National Product at Market Price:-

Items (₹ in crore)
1. Net Factor Income to abroad – 10
2. Net current transfers to abroad 5
3. Consumption of fixed capital 40
4. Compensation of employees 700
5. Corporate tax 30
6. Undistributed Profits 10
7. Interest 90
8. Rent 100
9. Dividends 20
10. Net Indirect tax 110
11. Social security contributions by employees 11

12. Calculate the Gross National Product at Market Price:

Items (₹ in crore)
1. Wages and Salaries 800
2. Personal tax 150
3. Operating Surplus 200
4. Undistributed Profits 10
5. Social Security contributions by employers 100
6. Corporate tax 50
7. Net factor income to abroad – 20
8. Personal disposable income 1200
9. Net indirect tax 70
10. Consumption of fixed capital 30
11. Mixed income of self employed 500
12. Royalty 9
13. Calculate National Income
Items (₹ in crore)
1. Rent 200
2. Net Factor income to abroad 10
3. National debt interest 15
4. Wages and Salaries 700
5. Current transfers from government 10
6. Undistributed profits 20
7. Corporation tax 30
8. Interest 150
9. Social Security Contributions by employers 100
10. Net domestic product accruing to government 250
11. Net Current transfers to rest of the world 5
12. Dividend 50
14. Calculate ‘Gross National Product at Market Price.
Items (₹ in crore)
1. Rent 100
2. Net Current transfers to rest of the world 30
3. Social Security contributions by employers 47
4. Mixed Income 600
5. Gross Domestic Capital Formation 140
6. Royalty 20
7. Interest 110
8. Compensation of Employees 500
9. Net Domestic Capital Formation 120
10. Net Factor income from abroad – 10
11. Net Indirect tax 150
12. profit 200

15. Calculate Net Domestic Product at Market Price from the

following.
Items (₹ in crore)
1. Income from domestic product accruing to government 120
2. Wages and Salaries 400
3. National Debt Interest 60
4. Profit 200
5. Net Factor income to abroad – 20
6. Rent 100
7. Current transfers from government 30
8. Interest 150
9. Social Security contribution by employers 50
10. Net indirect tax 70
11. Net current transfers to abroad – 10
16. Calculate ‘Gross National Product at Market Price’ from the
following.
Items (₹ in crore)
1. Net factor income to abroad – 10
2. Net current transfers to abroad 20
3. Wages and Salaries 400
4. Corporation tax 50
5. Profit after corporation tax 150
6. Social Security contributions by employers 50
7. Rent 100
8. Interset 70
9. Mixed income of self employed 300
10. Net Indirect tax 140
11. Consumption of fixed capital 80
17. Calculate ‘Net National Product at Factor Cost from the
following:-
Items (₹ in crore)
1. Social Security contributions by employees 90
2. Wages and Salaries 800
3. Net Current transfers to abraod – 30
4. Rent and Royalty 300
5. net factor income to abraod 50
6. Social security contributions by employers 100
7. Profit 500
8. Interest 400
9. Consumption of fixed capital 200
10. Net indirect tax 250
18. Calculate ‘Net National Product at Factor Cost from the
following:-
Items (₹ in crore)
1. National debt interest 60
2. Wages and salaries 600
3. Net current transfers to abroad 20
4. Rent 200
5. Transfer payments by government 70
6. Interest 300
7. Net domestic product at factor cost accruing to government 400
8. Social security contributions by employers 100
9. Net factor income paid to abroad 50
10. Profits 300
19. From the following data, calculate National Income:-
(₹ in
Items
crore)
1. Profit 1500
2. Rent 1300
3. Net Indirect taxes 350
4. Mixed income of self employed 600
5. Compensation of employees 3000
6. Reimbursement to the employees for medical expenses 300
7. Depreciation 200
8. Excess of factor income to rest of the world over factor income from rest of the world 50
9. Excess of imports over exports 40
10. Interest 1100
20. Calculate Operating Surplus from the following data:-
Items (₹ in crore)
1. Compensation of employees 300
2. Indirect taxes 200
3. Consumption of fixed Capital 100
4. Subsidies 50
5. Gross Domestic Product at market price 600
21. The following information is available for an economy, On
the basis of this information using income method, calculate: a)
Domestic Income, and b) National Income
Items (₹ in crore)
1. Wages 10,000
2. Rent 5,000
3. Interest 400
4. Dividend 3,000
5. Mixed Income 400
6. Undistributed profit 200
7. Social Security Contribution 400
8. Corporate profit tax 400
9. Net factor income from abroad 1000
22. Given the following data and using income method
calculate:-
a) Net Domestic Income
b) Gross Domestic Income
c) Net National Income
d) Net National Product at Market Price

Items (₹ in crore)
1. Indirect taxes 9000
2. Subsidies 1800
3. Depreciation 1700
4. Mixed Income of self employed 28000
5. Operating surplus 10000
6. Net factor income from abroad – 300
7. Compensation of employees 24000
23. Calculate the national income from the following data:-
Items (₹ in crore)
1. Mixed income of self employed 200
2. Old age pension 20
3. Dividends 100
4. Operating surplus 900
5. Wages and Salaries 500
6. Profits 400
7. Employer’s contribution to social security schemes 50
8. Net factor income from abroad – 10
9. Consumption of fixed capital 50
10. Net indirect tax 50
24. Calculate National Income from the following data:-
Items (₹ in crore)
1. Rent 80
2. Interest 100
3. Profits 210
4. Tax on Profits 30
5. Employee’s contribution to social security schemes 25
6. Mixed income of self employed 250
7. Net indirect tax 60
8. Employer’s contributions to social security schemes 50
9. Compensation of employees 500
10. Net factor income from abroad – 20
25. Calculate National Income from the following data:-
Items (₹ in crore)
1. Compensation of employees 400
2. Profits 200
3. Rent 150
4. Interest 100
5. Dividends 120
6. Employer’s contributions to social security schemes 40
7. Mixed income of self employed 500
8. Direct tax 100
9. Net factor income from abroad – 50
26. From the following data, calculate Gross National Product at
Market prices:-
Items (₹ in crore)
1. Undistributed profits of private corporate enterprises 200
2. Rent 400
3. Interest 200
4. Profits 600
5. Dividends 300
6. Wages and Salaries 225
7. Net exports – 20
8. Net indirect tax 70
9. Consumption of fixed capital 30
10. Compensation of employees 250
11. Mixed income of self employed 100
12. Net factor income from abroad – 10
27. Calculate national income from the following data:
Items (₹ in crore)
1. Interest 50
2. Corporate tax 10
3. Net indirect tax 40
4. Rent 20
5. Dividends paid 30
6. Compensation of employees 200
7. Consumption of fixed capital 15
8. Undistributed profits 5
9. Net factor income received from abroad –5
10. Royalty 10
28. Calculate GDP at MP and GNP at FC from the following data:-
Items (₹ in crore)
1. Operating Surplus 700
2. Profit 100
3. Wages and Salaries (cash) 1000
4. Interest 200
5. Consumption of fixed capital 50
6. Net factor income from abroad – 10
7. Value of benefits in kind provided to employees 200
8. Goods and service tax 150
9. Subsidies 10
29. Calculate GNP at MP:-
Items (₹ in crore)
1. Mixed income of the self employed 800
2. Consumption of fixed capital 50
3. Wage and salaries 700
4. Compensation of employees from abroad 20
5. Rent on land 200
6. Royalty of sub soil assets 30
7. Interest paid by production units 150
8. Interest paid by consumers 100
9. Profits 300
10. Social security contribution by employers 100
11. Property and entrepreneurial income from abroad – 20
12. Net indirect tax 200
30. Calculate GDP at MP
Items (₹ in crore)
1. Dividend paid 20
2. Depreciation 25
3. Rent 75
4. Interest 125
5. Undistributed profits 50
6. Subsidies 10
7. Goods and services tax (GST) 40
8. Corporation tax 30
9. Mixed Income 500
10. Net factor income from abroad – 20
11. Compensation of employees 300
31. Calculate Operating Surplus
Items (₹ in crore)
1. GNP at market price 1000
2. Wages and Salaries 400
3. Consumption of fixed capital 50
4. Net factor income to abroad – 10
5. GST 100
6. Social security contributions by employees 60
7. Subsidies 20
8. Mixed income of the self employed 200
9. Interest 40
10. Social security contribution by employers 100
1 Calculate Net National Product at Market Price:
Items (₹ in crore)
1. Gross domestic fixed capital formation 400
2. Private final consumption expenditure 8000
3. Government final consumption expenditure 3000
4. Change in Stock 50
5. consumption of fixed capital 40
6. Net indirect taxes 100
7. Net exports – 60
8. Net factor income to abroad – 80
9. Net current transfers from abroad 100
10. Dividend 100
2. Calculate National Income
Items (₹ in crore)
1. Net factor income to abroad – 50
2. Net indirect taxes 800
3. Net current transfers from rest of the world 100
4. Net imports 200
5. Private final consumption expenditure 5000
6. Government final consumption expenditure 3000
7. Gross domestic capital formation 1000
8. consumption of fixed capital 150
9. change in stock – 50
10. Mixed income 4000
11. Scholarship to students 80
3. Calculate Net Domestic Product at Factor Cost
Items (₹ in crore)
1. Private final consumption expenditure 8000
2. Government final consumption expenditure 1000
3. Exports 70
4. Imports 120
5. Consumption of fixed capital 60
6. Gross domestic fixed capital formation 500
7. Change in stock 100
8. Factor income to abroad 40
9. Factor income from abroad 90
10. Indirect taxes 700
11. Subsidies 50
12. Net Current transfers to abraod (-) 30
4. Calculate National Income
Items (₹ in crore)
1. Corporation tax 100
2. Private final consumption expenditure 900
3. Personal income tax 120
4. Government final consumption expenditure 200
5. Undistributed profits 50
6. Change in stocks – 20
7. Net Domestic fixed capital formation 120
8. Net Imports 10
9. Net Indirect tax 150
10. Net factor income from abroad – 10
11. Private Incom 1000
5. Calculate Net National Product at Market Price:
Items (₹ in crore)
1. Net Current transfers to abroad 10
2. Private final consumption expenditure 500
3. Current transfers from government 30
4. Net factor income to abroad 20
5. Net exports – 20
6. Net indirect tax 120
7. National debt interest 70
8. Net Domestic Capital formation 80
9. Income accruing to government 60
10. Government final consumption expenditure 100

6. Find Gross National Product at Market Price:

Items (₹ in crore)
1. Private final consumption expenditure 800
2. Net Current transfers to abroad 20
3. Net factor income to abroad – 10
4. Government final consumption expenditure 300
5. Net Indirect tax 150
6. Net Domestic Capital Formation 200
7. Current transfers from government 40
8. Depreciation 100
9. Net Imports 30
10. Income accruing to government 90
11. National debt interest 50
7. Calculate National Income
Items (₹ in crore)
1. Net imports 5
2. Net domestic capital formation 15
3. Personal Income 90
4. National debt interest 10
5. Corporate tax 25
6. Government final consumption expenditure 20
7. Net factor income to abroad –5
8. Net indirect tax 10
9. Undistributed profits 0
10. Private final consumption expenditure 100
8. Calculate Net Domestic Product at Market Price.
Items (₹ in crore)
1. Private Final consumption expenditure 400
2. Opening stock 10
3. Consumption of fixed capital 25
4. Imports 15
5. Government final consumption expenditure 90
6. Net current transfers to rest of the world 5
7. Gross domestic fixed capital formation 80
8. Closing stock 20
9. Exports 10
10. Net factor income to abroad –5
[CBSE AI 2015]

9. Calculate Net National Product at Market Price

Items (₹ in crore)
1. Transfers Payments by government 7
2. Government final consumption expenditure 50
3. Net imports – 10
4. Net domestic fixed capital formation 60
5. Private final consumption expenditure 300
6. Private Income 280
7. Net factor income to abroad –5
8. Closing Stock 8
9. Opening stock 8
10. Depreciation 12
11. Corporate tax 60
12. Retained earnings of corporations 20
10. Calculate Net Domestic Product at Factor Cost:
Items (₹ in crore)
1. Net Current transfers to abroad 15
2. Private final consumption expenditure 800
3. Net imports – 20
4. Net domestic capital formation 100
5. Net factor income to abroad 10
6. Depreciation 50
7. Change in stocks 17
8. Net indirect tax 120
9. Government final consumption expenditure 200
10. Exports 30
11. Calculate ‘National Income’.
Items (₹ in crore)
1. Personal tax 80
2. Private final consumption expenditure 600
3. Undistributed profits 30
4. Private Income 650
5. Government final consumption expenditure 100
6. Corporate tax 50
7. Net Domestic fixed capital formation 70
8. Net Indirect tax 60
9. Depreciation 14
10. Change in stocks – 10
11. Net imports 20
12. Net factor income to abroad 10
12. Calculate ‘National Income’ from the following
Items (₹ in crore)
1. Net Imports 60
2. Net current transfers to abroad – 10
3. Net domestic fixed capital formation 300
4. Government final consumption expenditure 200
5. Private final consumption expenditure 700
6. Consumption of fixed capital 70
7. Net change in stocks 30
8. Net factor income to abroad 20
9. Net indirect tax 100
13. Calculate ‘Net National Product at Market Price’ from the
following.
Items (₹ in crore)
1. Closing stock 10
2. Consumption of fixed capital 40
3. Private final consumption expenditure 600
4. Exports 50
5. Opening stock 20
6. Government final consumption expenditure 100
7. Imports 60
8. Net domestic fixed capital formation 80
9. Net current transfers to abroa – 10
10. Net factor income to abroad 30
14. Calculate National Income from the following.
Items (₹ in crore)
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
10. Net capital transfers to abroad 25
15. Calculate ‘Net Domestic Product at Factor Cost’ from the
following:-
Items (₹ in crore)
1. Net Current transfers to abroad 5
2. Government final consumption expenditure 100
3. Net indirect tax 80
4. Private final consumption expenditure 300
5. Consumption of fixed capital 20
6. Gross domestic fixed capital formation 50
7. Net imports – 10
8. Closing stock 25
9. Opening stock 25
10. Net factor income to abroad 10
16. Calculate National Income from the following:
Items (₹ in crore)
1. Net current transfers to abroad – 15
2. Private final consumption expenditure 600
3. Subsidies 20
4. Government final consumption expenditure 100
5. Indirect tax 120
6. Net imports 20
7. Consumption of fixed capital 35
8. Net change in stocks – 10
9. Net factor income to abroad 5
10. Net domestic capital formation 110
17. Calculate Gross Fixed Capital Formation from the following
data:-
Items (₹ in crore)
1. Private final consumption expenditure 1000
2. Government final consumption expenditure 500
3. Net Exports – 50
4. Net Factor income from abroad 20
5. Gross Domestic product at market price 2500
6. Opening Stock 300
7. Closing Stock 200
18. Find NDP at FC from the following data.

Items (₹ in crore)
1. Gross Domestic fixed investment 10000
2. Inventory investment 5000
3. Depreciation 2000
4. Indirect taxes 1000
5. Subsidies 2000
6. Consumption Expenditure 20000
7. Residential Construction Investment 6000
19. From the following data, calculate the GDP at both (a)
Market price, and (b) Factor Cost.
Items (₹ in crore)
1. Gross investment 90
2. Net exports 10
3. Net indirect taxes 5
4. Depreciation 15
5. Net factor income from abroad –5
6. Private consumption expenditure 350
7 Government purchases of goods and services 100
20. Calculate the gross national product at factor cost from the
following data:-
Items (₹ in crore)
1. Net Domestic Fixed capital formation 350
2. Closing Stock 100
3. Government final consumption expenditure 200
4. Net indirect tax 50
5. Opening stock 60
6. Consumption of fixed capital 50
7. Net exports – 10
8. Private final consumption expenditure 1500
9. Imports 20
10. Net factor income from abroad – 10
21. Calculate Gross Domestic Product at market price from the
following data:-
Items (₹ in crore)
1. Consumption of fixed capital 50
2. Closing stock 40
3. Private final consumption expenditure 500
4. Opening stock 60
5. Net factor income from abroad – 35
6. Exports 25
7. Government final consumption expenditure 200
8. Imports 40
9. Net indirect tax 100
10. net domestic capital formation 300
GDP at MP = ₹ 1035 crore

22. Calculate national income from the following data:-

Items (₹ in crore)
1. Gross Domestic capital formation 100
2. Net change in stocks 10
3. Consumption of fixed capital 20
4. Private final consumption expenditure 500
5. Government final consumption expenditure 200
6. Exports 80
7. Imports 70
8. Net indirect tax 60
9. Net factor income received from abroad – 10
23. Calculate NNP at MP from the following data:-
(₹ in
Items
crore)
1. Household final consumption expenditure 1000
2. Net domestic fixed capital formation 100
3. Government final consumption expenditure 200
4. Final consumption expenditure of private non-profit institutions serving
50
households
5. Net change in stocks 40
6. Net exports – 20
7. Net factor income from abroad 10
8. Indirect tax 70
9. Subsidies 20
24. Calculate GNP at MP from the following data:-
Items (₹ in crore)
1. Government final consumption expenditure 300
2. Net domestic fixed capital formation 200
3. Private final consumption expenditure 2000
4. Consumption of fixed capital 40
5. Closing stock 50
6. Opening stock 40
7. Net exports –5
8. Net indirect tax 30
9. Net factor income from abroad – 10
25. Calculate NVA at FC from the following data:-
Items (₹ in crore)
1. Indirect tax 60
2. Closing stock 100
3. Sales 1000
4. Intermediate cost 420
5. Opening stock 80
6. Consumption of fixed capital 50
7. Subsidies 10
26. Find value added by firm X from the following data:-

Items (₹ in crore)
1. Sales by firm X to firm Z 200
2. Purchases by firm Y form firm X 100
3. Sale by firm Z to firm X 150
4. Closing stock of firm X 40
5. Closing stock of firm Z 30
6. Opening stock of firm X 50
27. A Farmer purchases ₹ 1,000 worth of seeds, ₹ 2000 worth of
fertilisers, and pays ₹ 1500 as water charges to raise a wheat
crop. He produces 50 quintals of wheat and sells the same at ₹
200 per quintal. Calculate value added by the farmer.

28. There are two firms A and B. A buys, ₹ 200 worth of raw
materials from B. B buys ₹ 300 worth of raw materials from A.
The value of total output of firm A is ₹ 1000 and that of B is ₹
1,500. Find out value added by A and B. What measure of Value
added is this?

29. Calculate NDP at factor cost:-

Items (₹ in crore)
1. Net domestic fixed capital formation 70
2. Private final consumption expenditure 300
3. Exports 20
4. Consumption of fixed capital 10
5. Government final consumption expenditure 100
6. Closing stock 15
7. Imports 30
8. Opening stock 5
9. Net indirect tax 80
10. Net factor income to abroad – 10
NDP at FC = ₹ 390 crore

30. Calculate National Income:-

Items (₹ in crore)
1. Net imports 15
2. Net current transfers from abroad 10
3. Goods and services tax (GST) 30
4. Net change in stocks 5
5. Net domestic capital formation 60
6. Private final consumption expenditure 350
7. Government expenditure on providing free services 75
8. Depreciation 10
9. Net factor income to abroad – 15
10. Subsidies 5
31. Calculate NNP at MP:-
Items (₹ in crore)
1. Gross domestic fixed capital formation 80
2. Government final consumption expenditure 150
3. Closing stock 20
4. Private final consumption expenditure 500
5. Net domestic capital formation 70
6. Opening stock 20
7. Net imports – 30
8. Factor income paid to abroad 15
9. Net indirect tax 40
10. Factor income received from abroad 10