How are the following treated while estimating private final consumption expenditure? Give reasons for your answer.
(i) Exports.
(ii) Direct purchases made abroad by resident households.
(iii) Final consumption expenditure of non-profit institutions serving households.
(iv) Change in stocks.

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Solution

(i) Exports will not be included in private final consumption expenditure as exports do not reflect consumption expenditure by residents.
(ii) It will be included in private final consumption expenditure as such purchases are meant for consumption.
(iii) It will be included in private final consumption expenditure as non-profit institutions serving households are a component of household sector.
(iv) It will not be included In private final consumption expenditure as it is a component of capital formation.

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Q. From the following data, calculate National Income by Income method and Expenditure method:

	Item	Rs. in crores
(i)	Compensation of employees	700
(ii)	Government final consumption expenditure	750
(iii)	Net factor income from abroad	(-) 10
(iv)	Net exports	(-) 15
(v)	Profits	600
(vi)	Net indirect taxes	60
(vii)	Mixed income of self-employed	350
(viii)	Rent	200
(ix)	Interest	310
(x)	Private final consumption expenditure	1100
(xi)	Net domestic capital formation	385
(xii)	Consumption of fixed capital	65

From the following data calculate National income:

(a) Income method

(b) Expenditure method

(a) Compensation of employees 1200

(b) NFIA - 20

(d) Profit 800

(e) Private final consumption expenditure 2000

(f) Net domestic capital formation 770

(g) Consumption of fixed capital 130

(h) Rent 400

(i) Interest 620

(j) Mixed income of self-employed 700

(k) Net exports - 30

(l) Govt. final consumption exp. 1100

Which of the following will be included in National Income?

(a) Seeds purchased by a farmer

(b) Salary given to an Indian working in the Japanese embassy in India

(d) Imports by a household

(a) Define GNP at MP.

(b) Calculate National Income by Income and Expenditure methods.

$\begin{matrix} Items & (Rs. in crores) (i) & Rent & 1, 500 (i i) & Net factor income from abroad & 50 (i i i) & Wages and salaries & 25, 000 (i v) & Indirect tax & 1, 000 (v) & Government final consumption expenditure & 11, 200 (v i) & Subsidies & 300 (v i i) & Royalty & 200 (v i i i) & Net exports & (-) 200 (i x) & Interest & 6, 400 (x) & Corporate tax & 200 (x i) & Profit after tax & 4, 000 (x i i) & Households final consumption expenditure & 26, 000 (x i i) & Change in stock & 100 (x i v) & Net domestic fixed capital formation & 600 (x v) & Final consumption expenditure of private non-profit institutions serving households & 300 \end{matrix}$

Which of the following will be included in national income?

(a) Renovation of a residential building

(b) Repair and maintenance of residential building

(a) Derive $N D P_{f c}$ from $G D P_{m p .}$

(b) Calculate gross fixed capital formation:

$N D P_{f c} = 5500$

Depreciation = 100

Private final consumption expenditure =1200

Government final consumption expenditure =1000

Net imports =700

Subsidies =40

Decrease in stock =-200

From the following data, calculate Gross National Product at Market Price by:
(a) Income method
(b) Expenditure method

$\begin{matrix} 1. & Mixed income of self employed & 400 2. & Compensation of employeees & 500 3. & Private final conosumption expenditure & 900 4. & Net factor income from abroad & - 20 5. & Net indirect taxes & 100 6. & Consumption of fixed capital & 120 7. & Net domestic capital formation & 280 8. & Net exports & - 30 9. & Profits & 350 10. & Rent 11. & Interest & 150 12. & Government final consumption expenditure & 450 \end{matrix} - ----------------------------------------------------------- -$

OR

Categorise the following as final and intermediate good. Give reasons:
(a) Machine purchased by a household
(b) Machine purchased by a firm
(c) Machine purchased for resale purpose

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How are the following treated while estimating private final consumption expenditure? Give reasons for your answer.(i) Exports. (ii) Direct purchases made abroad by resident households.(iii) Final consumption expenditure of non-profit institutions serving households. (iv) Change in stocks.

How are the following treated while estimating private final consumption expenditure? Give reasons for your answer.
(i) Exports.
(ii) Direct purchases made abroad by resident households.
(iii) Final consumption expenditure of non-profit institutions serving households.
(iv) Change in stocks.