Q: Circular flow of income in a two sector economy is based on the axiom that one’s expenditure is other’s income’.
Do you agree with the given statement? Support your answer with valid i agree with the statement
Explanation:
In a two sector economy the firms produce goods and service...
1. Calculate Value Added at factor cost from the following.
ITEMS Rs. CRORES
a. Purchase of raw materials 30
b. Depreciation 12
c. Sales 200
d. Excise tax 20
e. Opening stock 15
f. Intermediate consumption 48
g. Closing stock 10
2. Calculate
(a) Net National Product at MP.
ITEMS Rs. crores
a. Private final Consumption expenditure 200
b. Net indirect taxes 20
c. Change in stocks (--)15
d. Net current transfers from abroad (--)10
e. Govt. final consumption expenditure 50
f. Consumption of fixed capital 15
g. Net domestic capital formation 30
h. Net factor income from abroad 5
i. Net imports 10
3. Calculate Gross Domestic Product at Market Price by
(a) Production Method and (b) Income Method
ITEMS Rs. Crores
a. Intermediate consumption by
i) Primary sector 500
ii) Secondary sector 400
iii) Tertiary sector 40
b. Value of output by
i) Primary sector 1000
ii) Secondary sector 900
iii) Tertiary sector 700
c. Rent 10
d. Compensation of employees 400
e. Mixed income 550
f. Operating surplus 300
g. Net factor income from abroad (--)20
h. Interest 5
i. Consumption of fixed capital 40
j. Net indirect taxes 10
4. ESTIMATE NATIONAL INCOME BY
(a) EXPENDITURE METHOD (b) INCOME METHOD FROM THE FOLLOWING DATA
Rs. in crores
1. Private final consumption expenditure 210
2. Govt: final consumption expenditure 50
, 3. Net domestic capital formation 40
4. Net exports (-) 5
5. Wages & Salaries 170
6. Employer’s contribution 10
7. Profit 45
8. Interest 20
9. Indirect taxes 30
10. Subsidies 05
11. Rent 10
12. Factor income from abroad 03
13. Consumption of fixed capital 25
14. Royalty 15
5. FROM THE FOLLOWING DATA CALCULATE
(a) NATIONAL INCOME
1. Profit 500
2. Rent 200
3. Private income 2000
4. Mixed income of self-employed 800
5. Compensation of employee 1000
6. Consumption of fixed capital 100
7. Net factor income from abroad -(50)
8. Net retained earnings of private employees’ 150
9. Interest 250
10. Net exports 200
11. Corporate tax 100
12. Net indirect tax 160
13. Direct taxes paid by houses hold’s 120
14. Employers contribution to social security scheme. 60
6. CALCULATE NATIONAL INCOME FROM THE FOLLOWING DATA.
1. Net indirect tax 05
2. Net domestic fixed capital formation 100
3. Net exports (-) 20
4. Govt. final consumption expenditure 200
5. Net current transfer from abroad 15
6. Private final consumption exp enditure 600
7. Change in stock 10
8. Net factor from abroad 05
9. Gross domestic fixed capital formation 125
7. CALCULATE NNP AT MARKET PRICE BY PRODUCTION METHOD AND INCOME METHOD
1. Inter mediate consumption
(a) primary sector 500
(b) Secondary sector 400
(c) tertiary sector 300
2. Value of output of
(a) primary sector 1,000
(b) Secondary sector 900
(c) tertiary sector 700
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