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Solved National Income Expenditure Method

The document provides various examples of calculating National Income using the Expenditure Method, detailing the components such as Private Final Consumption, Government Final Consumption, Gross Domestic Capital Formation, and Net Exports. Each example illustrates the formula used to derive GDP at Market Price and National Income, including adjustments for indirect taxes and depreciation. The calculations demonstrate different scenarios and values leading to the final National Income figures.

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70 views3 pages

Solved National Income Expenditure Method

The document provides various examples of calculating National Income using the Expenditure Method, detailing the components such as Private Final Consumption, Government Final Consumption, Gross Domestic Capital Formation, and Net Exports. Each example illustrates the formula used to derive GDP at Market Price and National Income, including adjustments for indirect taxes and depreciation. The calculations demonstrate different scenarios and values leading to the final National Income figures.

Uploaded by

rajahir1009
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Solutions - National Income Worksheet 3 (Expenditure Method)

Example 1

a) GDP at MP = Private Final Consumption + Govt Final Consumption + Gross Domestic Capital

Formation + Net Exports

= 3500 + 4000 + 1100 + 500 = Rs. 9100 crores

b) National Income = GDP at MP - Net Indirect Taxes + Net Factor Income from Abroad

= 9100 - (300 - 40) + 100 = Rs. 8940 crores

Example 2

GDP at MP = Private Consumption + Government Consumption + Gross Fixed Capital Formation +

Change in Stock + Net Exports

= 15000 + 11500 + 1000 + 200 + (500 - 700) = Rs. 27900 crores

Example 3

Operating Surplus = National Income - (Wages + Mixed Income + Rent + Interest + Profit)

Operating Surplus = 22100 - (12000 + 4800 + 1200 + 230 + 220) = Rs. 5650 crores

Gross Domestic Capital Formation = Private + Govt + Change in Stock = Not directly available,

assumed combined as Rs. 6500

Example 4

National Income = PFCE + GFCE + Net Domestic Capital Formation + Net Exports + Net Factor

Income from Abroad

= 900 + 400 + 200 + (-25) + (-10) = Rs. 1465 crores

Example 5

NDP at FC = PFCE + GFCE + GDCF + Net Exports + Net Factor Income from Abroad -

Depreciation - Net Indirect Taxes

= 8000 + 1000 + (500+100) + (70 - 120) + (90 - 40) - 60 - (700 - 50) = Rs. 9660 crores

Example 6

National Income = PFCE + GFCE + GDCF + Net Exports + NFIA - Depreciation - NIT
= 5000 + 3000 + 1000 + (-200) + (-50) - 150 - 800 = Rs. 9800 crores

Example 7

National Income = PFCE + GFCE + Net Domestic Capital Formation + Net Exports + NFIA

= 500 + 100 + 150 + (-25) + 10 = Rs. 735 crores

Example 8

National Income = PFCE + GFCE + GDCF + Net Exports + NFIA - Depreciation

= 1750 + 100 + (300+50) + (-25) + (-20) - 25 = Rs. 2130 crores

Example 9

NNP at MP = PFCE + GFCE + Net Domestic Capital Formation + Net Exports + NFIA

= 500 + 100 + 80 + (-20) + (-20) = Rs. 640 crores

Example 10

National Income = PFCE + GFCE + Net Domestic Capital Formation + Net Exports + NFIA -

Depreciation

= 250 + 60 + 40 + (-10) + (-5) - 20 = Rs. 315 crores

Example 11

National Income = PFCE + GFCE + Net Domestic Capital Formation + Net Exports + NFIA -

Depreciation

= 200 + 60 + 70 + (20 - 20) + (-5) - 15 = Rs. 290 crores

Example 12

National Income = PFCE + GFCE + GDCF + Net Exports + NFIA - Depreciation - NIT

= 500 + 100 + 200 + (-40) + (-10) - 70 - 120 = Rs. 560 crores

Example 13

GDP at MP = PFCE + GFCE + Gross Domestic Fixed Capital Formation + Change in Inventories +

Net Exports

= 9950 + 1250 + 1500 + 1250 + (850 - 1050) = Rs. 13950 crores

Example 14

National Income = PFCE + GFCE + Gross Domestic Capital Formation + Net Exports + NFIA -
Depreciation - NIT

= 900 + 400 + 250 + (-30) + (-40) - 20 - 100 = Rs. 1360 crores

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