Methods of Calculating National Income
Economics ⇒ National Income and Related Aggregates
Methods of Calculating National Income starts at 12 and continues till grade 12.
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See sample questions for grade 12
A country has the following data: GDP at market prices = ₹12,000 crore, Net factor income from abroad = ₹1,000 crore, Depreciation = ₹800 crore, Net indirect taxes = ₹1,200 crore. Calculate National Income (NNP at factor cost).
A country has the following data: Private final consumption expenditure = ₹4000 crore, Government final consumption expenditure = ₹2000 crore, Gross domestic capital formation = ₹1500 crore, Net exports = ₹-500 crore. Calculate GDP at market prices using the expenditure method.
A country has the following data: Value of output = ₹10,000 crore, Value of intermediate consumption = ₹6,000 crore, Depreciation = ₹500 crore. Calculate Net Value Added at Factor Cost (NVAFC).
A country has the following data: Wages = ₹5000 crore, Rent = ₹2000 crore, Interest = ₹1000 crore, Profits = ₹3000 crore, Net factor income from abroad = ₹500 crore. Calculate the national income using the income method.
Describe the main difference between the product method and the income method of calculating national income.
Explain the basic steps involved in the expenditure method of calculating national income.
Explain the concept of 'value added' in the context of the product method.
Explain the meaning of 'net factor income from abroad' in the context of national income calculation.
Explain the steps to avoid double counting in the product method.
Explain why double counting should be avoided in the product method of calculating national income.
Explain why the expenditure method is also called the final product method.
Explain why the income method may not be suitable for countries with a large informal sector.
