MACROECONOMICS CHAPTER-3, NATIONAL INCOME AND RELATED AGGREGATES SOLUTIONS

UNSOLVED PRACTICALS

Q.1)Calculate GNP at FC.

PARTICULARS	In crores
1.) NDP at MP	80,000
2.) Net factor income from abroad	-200
3.)depreciation	4,950
4.)subsidies	1,770
5.)indirect tax	10,600

SOLUTION:

GNPFC=NDPMP+Depreciation+NFIA-Net Indirect Tax

GNPFC=80,000+4,950+(-200)-(10,600-1,770)

GNPFC=84,950-200-8,830

GNPFC=75,920

Q.2)Calculate the Domestic Income.

Particulars	In crores
GNPMP	58,350
Indirect Tax	2,590
Subsidies	1,540
Depreciation	1,625
Net Factor Income from abroad	-240

SOLUTION:

NDPFC=GNPMP-Depreciation-NFIA-Net Indirect Tax

NDPFC=58,350-1,625-(-240)-(2,590-1,540)

NDPFC=58,350-1,625+240-1050

NDPFC=55,915

Q.3)Calculate National Income or NNPFC.

Particulars	In crores
GDPMP	4,800
Indirect Taxes	300
Net Factor Income from abroad	80
Depreciation	200
Subsidies	60

SOLUTION:

NNPFC=GDPMP-Depreciation+NFIA-Net Indirect Tax

NNPFC=4,800-200+80-(300-60)

NNPFC=4,800-200+80-240

NNPFC=4,440

Q.4)Calculate GDPMP.

Particulars	In crores
National Income	6,700
Depreciation	180
Factor Income from abroad	100
Indirect Taxes	130
Subsidies	70
Factor Income to abroad	150

SOLUTION:

GDPMP=NNPFC+Depreciation-NFIA+Net Indirect Tax

GDPMP=6,700+180-(100-150)+(130-70)

GDPMP=6,880+50+60

GDPMP=6,990

Q.5)Calculate Domestic Income.

Particulars	In crores
GNPFC	2,700
Indirect Taxes	60
Factor Income from abroad	150
Factor Income to abroad	180
Depreciation	150

SOLUTION:

NDPFC=GNPFC-Depreciation-NFIA

NDPFC=2,700-150-(150-180)

NDPFC=2,700-150+30

NDPFC=2,580

Q.6)Calculate (a)Domestic Income (b)National Income.

Particulars	In crores
GDPMP	70,150
Indirect Taxes	5,200
Factor Income from abroad	800
Depreciation	3,100
Factor Income to abroad	300
Subsidies	4,000

SOLUTION:

NDPFC= GDPMP- Depreciation- Net Indirect Tax

NDPFC=70,150-3,100-(5,200-4,000)

NDPFC=70,150-3,100-1200

NDPFC=65,850

NNPFC= NDPFC+NFIA

NNPFC=65,850+(800-300)

NNPFC=65,850+500

NNPFC=66,350

Q.7)Calculate Indirect Taxes from the following data.

Particulars	In crores
NDPFC	55,915
Subsidies	1,540
Factor Income from abroad	625
Depreciation	1,625
Factor Income to abroad	865
GNPMP	58,350

SOLUTION:

GNPMP= NDPFC+ Depreciation+NFIA+ Net Indirect Tax

58,350=55,915+1,625+(625-865)+( Indirect Taxes-1,540)

58,350=55,760+ Indirect Taxes

58,350-55,760= Indirect Taxes

2,590= Indirect Taxes

Q.8)Calculate factor Income to abroad.

Particulars	In crores
GNPFC	4,280
Subsidies	80
Factor Income from abroad	400
Depreciation	480
Indirect Taxes	100
NDPMP	3,700

SOLUTION:

GNPFC= NDPMP+ Depreciation+NFIA- Net Indirect Tax

4,280=3,700+480+(400-FITA)-(100-80)

4,280=4,560-FITA

4,280-4,560=-FITA

-280=-FITA

280=FITA

Q.10)Calculate Subsidies.

Particulars	In crores
GDPFC	55,000
Indirect Taxes	4,400
Factor Income to abroad	600
NNPMP	55,500
Factor Income from abroad	1,300
Depreciation	2,500

SOLUTION:

GDPFC= NNPMP+ Depreciation-NFIA- Net Indirect Tax

55,000=55,500+2,500-(1300-600)-(4,400- Subsidies)

55,000=52,900+ Subsidies

55,000-52,900= Subsidies

2,100= Subsidies

Q.9)Calculate Depreciation.

Particulars	In crores
NDPMP	80,000
Indirect Taxes	10,600
GNPFC	75,920
Factor Income to abroad	700
Factor Income from abroad	500
Subsidies	1,770

SOLUTION:

GNPFC= NDPMP+ Depreciation+NFIA- Net Indirect Tax

75,920=80,000+ Depreciation+(500-700)-(10,600-1,770)

75,920=70,970+ Depreciation

75,920-70,970= Depreciation

4,950= Depreciation

Q.11)Gross National Product at market prices of an economy is 65,000 crores. The capital stock of the economy is valued at 1,20,000 crores, which depreciates at the rate of 10% per annum. Indirect taxes amount to 6000 crores and subsidies amount to 1000 crores. Estimate National Income of the economy.

SOLUTION:

GNPMP=65,000

Depreciation=1,20,000*10/100=12,000

Indirect taxes=6,000

Subsidies=1000

NNPFC= GNPMP- Depreciation- Net Indirect Tax

NNPFC=65,000-12,000-(6,000-1,000)

NNPFC=48,000

Milan Tomic

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