Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: National Income Accounting

Question:

Calculate operating surplus from the following :

    (₹ in Cr)
a Rent & Interest 50
b Bonus 80
c Profit After Tax 30
d Tax Rate 40%

Choose the correct option.

Options:

₹110 Cr

₹130 Cr

₹80 Cr

₹100 Cr

Correct Answer:

₹100 Cr

Explanation:

The correct answer is option (4) : ₹100 Cr

Pre Tax Profit= Profit After Tax / (1 - Tax Rate)

                      = ₹30 crore / (0.6) = ₹50 crore

Factors of production are: labourer (earning wages), entrepreneur (earning profits), as landlord (earning rents), as owner of capital (earning interests)

Operating surplus means the amount left with a firm after paying wages

Operating surplus = Rent + Interest + Profits

                             = 50+50

                             =100 Cr