Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Read the passage carefully and answer the questions based on the passage:

Composition of GDP: Income Method

S.No.

Items

Estimates (in crores)

1

Compensation for employees

2000

2

Rent

20

3

Interest

30

4

Royalty

40

5

Profit

50

6

Mixed income for self-employed

1000

7

Net factor income from abroad

-3

8

Indirect taxes

500

9

Subsidies

400

10

Depreciation

260

Calculate Operating surplus.

Options:

Rs. 140

Rs. 50

Rs. 540

Rs. 137

Correct Answer:

Rs. 140

Explanation:

The correct answer is Option (1) → Rs. 140

Operating Surplus is a component of national income calculated using the Income Method. It represents the income earned by the owners of capital — i.e., those who provide land, capital, or entrepreneurial effort — excluding wages and salaries. Thus, Operating Surplus includes:

  1. Rent – Income from land or buildings

  2. Interest – Income from lending capital

  3. Royalty – Income from intellectual property or natural resources

  4. Profit – Income earned by entrepreneurs (excluding wages)

Given, Rent = ₹20 crores, Interest = ₹30 crores, Royalty = ₹40 crores,Profit = ₹50 crores

Operating Surplus=20 + 30 +40 + 50

                         = ₹140 crores