Chapter 2 National Income - Part 6 Summary of Different Methods

Economics Class 12
Macroeconomics

#### Example 1.

Calculate the value added by firm A and firm B.

 Particulars ₹ in crores (i) Domestic Sales by firm A 4,000 (ii) Exports by firm A 1,000 (iii) Purchase by firm A 200 (iv) Sales by firm B 2,940 (v) Purchase by firm B 1,300

#### Example 11.

From the following data, calculate Net value added at factor cost.

 Particulars ₹ in Crores (i) Total Sales 1,000 (ii) Decrease in Stock 70 (iii) Production for Self Consumption 120 (iv) Purchase of raw materials 300 (v) Exports 150 (vi) Electricity Charges 50 (vii) Income Tax 20 (viii) Goods and Services Tax (GST) 70 (ix) Subsidy 40

#### Example 13.

From the following data, calculate Net Domestic Product at factor cost.

#### Example 14.

Firm A Sells to firm B for Rs 50 crores and for Rs 70 crores to providte consumption.

Firm B sells for Rs 80 crores to firm C .Firm C sells for Rs 100 Crores to provite comsumption.

Calculate value added by Firm A,Band C.

#### Example 15.

Firm A buys from X inputs worth ₹ 500 crores and sells to firm B good worth

₹ 1,000 crores and to firm C goods worth ₹ 700 crores. Firm B buys from Y inputs goods worth ₹ 200

crores and sells to firm C goods worth ₹ 1,500 crores and finished goods worth ₹ 2,000 crores

to households. Firm C buys from Z inputs worth ₹ 150 crores and sells finished goods worth

₹ 4,150 croses to households. Calculate value added by firms A, B and C and GDP MP.

#### Example 17.

In an economy, industry P sells output to Q. Q sells output to R for ₹ 600. Q's

value added is 1/2 of P's value added. Assuming P's value of inputs are 0, calculate how much

P sells to Q.

#### Example 18.

Sales by Firm A are ₹ 80 crores and sales by firm Bare ₹ 300 crores. Value added

by B and C are equal. Value of output of C and D are ₹ 280 crores each. Value added by D

is ₹ 120 crores and GDP MP is ₹ 520 crores. Assuming A's value of inputs are zero, calculate:

(i) Value added by firm B and firm C; (ii) Value of Inputs of firm B; (iii) Value of Inputs of firm C.

#### Example 19.

Firm A spent Rs 500 crores on non-factor inputs and sold goods worth Rs 600 crores

to firm B and ₹ 300 crores to firm C. Firm B whose value added is ₹ 1,000 crores sold half its

output to firm Cand half to firm D. Value added by firm C is 1/2 of value added of firm D. Firm

C and Firm D sold their entire output to households. Value of Output of firm Cis equal to firm

B's value of output. Calculate value of output of firm D.

#### Example 25.

Calculate the Operating Surplus.

 Particulars ₹  in Crores (i) Sales 4,000 (ii) Compensation of employees 800 (iii) Intermediate consumption 600 (iv) Rent 400 (v) Interest 300 (vi) Net indirect taxes 500 (vii) Consumption of fixed capital 200 (viii) Mixed income 400

#### Example 31.

Calculate National Income by Income and Expenditure method.

 Particulars ₹  in crores (i) Final Consumption Expenditure Private Sector 350 Government Sector 100 (ii) Mixed income of self employed 35 (iii) Gross domestic fixed capital formation 70 (iv) Opening stock 15 (v) Compensation of employees 250 (vi) Closing stock 25 (vii) Imports 20 (viii) Rent 75 (ix) Consumption of fixed capital 10 (x) Net indirect taxes 25 (xi) Interest 25 (xii) Net factor income from abroad -5 (xiii) Exports 10 (xiv) Profit 100

#### Example 32.

Calculate National Income by Income and Expenditure method.

 Particulars ₹  in crores (i) Compensation of employees 250 (ii) Imports 20 (iii) Mixed income of self employed 50 (iv) Gross fixed capital formation 120 (v) Private final consumption expenditure 550 (vi) Consumption of fixed capital 10 (vii) Net factor income from abroad 20 (viii) Indirect taxes 100 (ix) Change in stock 20 (x) Subsidies 20 (xi) Rent 100 (xii) Interest 200 (xiii) Profit 50 (xiv) Exports 10 (xv) Government final consumption expenditure 60

#### Example 33.

From the following data, calculate National Income by (a) Income method and

(b) Expenditure method:

 Particulars ₹ in crores (i) Private final consumption expenditure 2,000 (ii) Net capital formation 400 (iii) Change in stock 50 (iv) Compensation of employees 1,900 (v) Rent 200 (vi) Interest 150 (vii) Operating surplus 720 (viii) Net indirect tax 400 (ix) Employee ₹ ' contribution to social security schemes 100 (x) Net exports 20 (xi) Net factor income from abroad (-) 20 (xii) Government final consumption expenditure 600 (xiii) Consumption of fixed capital 100

#### Example 34.

From the following data, calculate National Income by Income and Expenditure Methods:

 Particulars ₹  in crores (i) Government final consumption expenditure 100 (ii) Subsidies 10 (iii) Rent 200 (iv) Wages and salaries 600 (v) Indirect taxes 60 (vi) Private final consumption expenditure 800 (vii) Gross domestic capital formation 120 (viii) Social security contribution by employer 55 (ix) Royalty 25 (x) Net factor income paid to abroad 30 (xi) Interest 20 (xii) Consumption of fixed capital 10 (xiii) Profit 130 (xiv) Net exports 70 (xv) Change in Stock 50