Sandeep Garg Macroeconomics Class 12: Chapter 3 National Income and Related Aggregate

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Sandeep Garg Solutions Class 12 – Chapter 3- Part B

Question 1

Calculate the domestic income or NDP at FC.

Particulars	₹ in crores
GNP at MP Subsidies Depreciation Net Factor income from abroad Indirect Tax	6,000 200 100 400 300

Solution:

NDP at FC

= GNP at MP- Depreciation-Net Factor income from abroad- (Indirect tax-Subsidies)

= 6,000-100-400- (300-200)

= ₹ 5,400 crores

Question 2

Calculate GNP at MP

Particulars	₹ in crores
Domestic Income or NDP at FC Depreciation Indirect Taxes Net Factor income to abroad	3,200 400 70 50

Solution:

GNP at MP

= NDP at FC + Depreciation – Net Factor income from abroad + Indirect tax

=3,200 + 400-50 + 70

= ₹3,620 crores

Question 3

Calculate national income or NNP at FC

Particulars	₹ in crores
GDP at MP Consumption of fixed capital Goods and services tax Factor income from abroad Subsidies Factor income to abroad	5,500 300 120 150 70 250

Solution:

National Income or NNP at FC

= GDP at MP -M Consumption of fixed capital + (Factor income from abroad – factor income to abroad) – (Goods and Services tax – Subsidies)

=5,500 – 300 + (150-250) – (120-70)

= ₹ 5,050 crores

Question 4

Define domestic income.

Ans: Domestic income is the net money value of all the final goods and services produced within the domestic territory of a country during a period of one year.

Question 5

When will the GDP of an economy be equal to the GNP?

Ans: GDP and GNP will be equal when the net factor income from abroad is zero

Question 6

In which type of economy will the domestic income be equal to the national income?

Ans: Closed economy