Fill in the blanks with appropriate alternatives given in the brackets.
1) National income is the subject matter of _________ Economics. (Micro / Macro/ Managerial / Business).
2) GDP _(FC) = GDP _(MP) – ______ (factor cost/indirect taxes/depreciation/subsidy)
3) In India, the responsibility for the calculation of national income rests with _. (World Bank/International Monetary Fund/Central Statistical Organization/International Labour Organization)
4) National income is concept. (stock/final/intermediate/flow)
5) Paper purchased by a publisher is ____. (intermediate good/final good/consumer good/service)

Open in App

Solution

1) National income is the subject matter of Macro Economics.

Explanation:
Macroeconomics focuses on how income levels are determined in the economy. Also, it studies the causes behind fluctuations in the income levels and accordingly what strategies can be adopted to accelerate growth in national income. Thus, national income is the subject matter of macroeconomics.

2) GDP_FC = GDP_{MP ⁻} Net Indirect Taxes

Explanation:
Market price (MP) includes indirect taxes levied by the government on different goods and services and subsidies. These should be deducted from it to get the actual factor price. In other words,when the Gross Domestic Product (GDP) is expressed in terms of factor cost, the impact of subsidies and indirect taxes is not taken into consideration. Thus,
GDP_FC= GDP_MP⁻ Net Indirect Taxes
GDP_FC = GDP_MP⁻ (Indirect Taxes − Subsidies)

3) In India, the responsibility for the calculation of national income rests with Central Statistical Organization.

Explanation:
In year 1955, the responsibility of calculation of national income was given to the Central Statistical Organisation (CSO).

4) National income is flow concept.

Explanation:
National income is a flow concept. This is because it refers to the flow of final goods and services in an economy.

5) Paper purchased by a publisher is intermediate good.

Explanation:
Intermediate goods are the goods which are used as a raw material in the production of final goods Accordingly, paper purchased by a publisher is an intermediate good. This is because the publisher would then further use the paper for the books he will publish.

Suggest Corrections

Similar questions

State the following statements are true or false.
1) Macro-Economics is known as income analysis.
2) Increase in national income is a Micro- Economic goal.
3) Macro-Economic adopts lumping method.
4) Study of price determination is a subject matter of Macro-Economics.
5) Micro-Economics deals with the study of aggregates.
6) National output is an example of macro variable.

Q. State whether the following statements are true or false.

1) National income is computed every year.
2) Inclusion of value of intermediate goods leads to double counting.
3) GDP includes net income from abroad.
4) Financial year in India is leap year.
5) Services of housewives are included in national income.

Q. Give reason or explain the following statements:

1) Income from second hand sale of goods is excluded from national income.
2) National income at factor cost includes subsidy.
3) National income estimates are accurate in India.
4) Old age pension is transfer income.
5) Paid services are included in national income.

Q. Answer in detail:

Explain the 'Final Good Approach' to avoid double counting of goods and services in the estimation of national income.

Q. Mention the situation in which following equations will hold true:
(i) National Income

=

Domestic Income
(ii)

G D P_{F C} > G D P_{M P}

(iii)

N N P_{F C} < N D P_{F C}

(iv)

G D P_{F C} = G D P_{M P}

(v) Domestic Income is greater than National Income.

Join BYJU'S Learning Program