Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Analyse the information given below , and answer the questions

  ₹ in crores
(i) Net Indirect Taxes 38
(ii) Consumption of fixed capital 34
(iii) Net factor Income from Abroad (-)3
(iv) Rent 100
(v) Profits 225
(vi) Interest 40
(vii) Mixed Income of self-employed 150
(viii) Wages and salaries 200
(ix) Employers' contribution to social security schemes 50

From the above information, calculate $GDP_{MP}$ :

Options:

₹761 crores

₹750 crores

₹837 crores

₹700 crores

Correct Answer:

₹837 crores

Explanation:

The correct answer is option (3) : ₹837 crores

Step 1: Calculate $NDP_{FC}$ : NDPFC is the sum of all incomes earned within the domestic economy (Rent, Profits, Interest, Mixed Income, Wages and salaries, Employers' contribution to social security schemes).

$NDP_{FC}$ =Rent+Profits+Interest+Mixed Income+Wages and salaries+ Employers' contribution to social security schemes

$NDP_{FC}$ = 100+225+40+150+200+50=765 crores

Step 2: Calculate $GDP_{FC}$ from $NDP_{FC}$ :

$GDP_{FC}$ = $NDP_{FC}$ + Consumption of Fixed Capital

                     = 765 +34

                     = 799 Cr

Step 3: Calculate $GDP_{MP}$ from $GDP_{FC}$

$GDP_{MP}$ = $GDP_{FC}$ + Net Indirect Raxes

                      = 799 + 38

                      = 837 Cr