Methods & Measurement of National Income

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By PIYUSH JOSHI

Q.46. Distinction between Net Factor Income From Abroad and Net Exports
Net exports Net factor income from abroad
1. Net export is the difference between 1. It refers to the difference between
the exports of a country to the rest factor income earned by our normal
of the world and imports from the resident from rest of the world and
rest of the world. factor income earned by non
residents.
2. Net Export = Export – Import. 2. NFIA = Factor Income from abroad
3. Net export is a part of domestic earned by the Normal residents –
income. factor income to non resident in
4. Its main components are: Export domestic territory.
and Import of goods, Export and 3. It is a part of national income.
Import of non-factor services. 4. Main components are: Net
compensation of employee, Net
income from property and
entrepreneurship, Net retained
earning of residents companies

Q.47. An economy has only two firms A and B. on the basis of the following information about
these firms, find out:
1. Value added by firms A and B
2. GDP at market prices
[Link]. Items Rs. In lakhs
1 Exports by Firm A 20
2 Imports by Firm A 50
3 Sales to households by Firm A 90
4 Sales to Firm B by Firm A 40
5 Sales to Firm A by Firm B 30
6 Sales to Households by Firm B 60

Ans.

Value added by Firm A = Exports by Firm A + Sales to Firm + Sales to households – Imports
by Firm A – Purchases from Firm B
= 20 + 40 + 90 – 50 – 30
= Rs.70 lakhs
Value added by Firm B = Sales to Firm A + Sales to Households – Purchase
from A
= 30 + 60 – 40
= Rs.50 lakh

GDP at market prices = Value added by Firm A + Value added by Firm B

= 70 + 50

= Rs.120 lakh

Q.48. Calculate Gross Value Added at Factor Cost:

[Link]. Items Rs. In lakhs
1 Units of output sold (units) 1,000
2 Price per unit of output (Rs.) 30
3 Depreciation (Rs.) 1,000
4 Intermediate cost (Rs.) 12,000

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5 Closing stock (Rs.) 3,000

6 Opening stock (Rs.) 2,000
7 Excise (Rs.) 2,500
8 Sales Tax (Rs.) 3,500

Ans.

GVAFC = ( 1×2) – (4) + (5 – 6) – (7) – (8)

GVAFC = (1,000 × 30) – 12,000 + 3,000 – 2,000 – 2,500 – 3,500
= 30,000 + 3,000 – (20,000)
= Rs.13,000 lakh

Q.49. Estimate the compensation of employees from the following data:

[Link]. Items Rs. In crore
1 Wages and salaries in cash 528
2 Free housing 162
3 Subsidy on lunch to employees 32
4 Employer’s contribution to social security 28
5 Compensation received by an injured worker from the
insurance company 10
6 Travelling expenses reimbursement 15

Ans . Compensation of Employees = Wages and Salaries in cash + free housing + subsidies on
lunch + Employer’s contribution to social security

= Rs.528 + Rs.162 + Rs.32 + Rs.28 = Rs.750 crore

Note: Items (v) and (vi) are not included in compensation of employees.
Q.50. Given the following data, calculate operating surplus:
[Link]. Items Rs. In crore
1 Sales 30,000
2 Compensation of employees 6,000
3 Intermediate consumption 8,000
4 Rent 2,500
5 Interest 2,200
6 Net indirect tax 1,500
7 Consumption of fixed capital 1,200

Ans.

Operating Surplus = Sales – Net Indirect tax – Intermediate consumption – consumption of

fixed capital – compensation of employees
= 30,000 – 1,500 – 8,000 – 1,200 – 6,000
= Rs.13,300crore
Q.51. Calculate GDPFC and GDPMP from the following data:
Items Rs. (In Crores)
1. Inventory investment 300
2. Depreciation 20
3. Net exports 120
4. NFIA 70
5. Net indirect taxes 50
6. Private final consumption expenditure 100
7. Government purchases of goods and services 200

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8. Investment on residential construction by households 110

9. Business fixed investment 70

Solution

GDPMP = Private Consumption Expenditure + Government Purchases of

Goods and Services + Business Fixed Investment + Investment on Residential
Consturction by household + Inventory Investment + Net exports

= 100 + 200 + 70 + 110 + 300 + 120

= Rs.900 crores.

GDPFC = GDPMP – Net Indirect Taxes

= 900 – 50 = Rs.850 Crores.
Q.52. Calculate NNPFC from the following data:
Items Rs. (In lakhs)
1. Final consumption expenditure 1000
2. Gross domestic investment 500
3. Government fixed investment 200
4. Closing stock 300
5. Opening stock 100
6. Exports 700
7. Imports 200
8. Depreciation 210
9. NFIA 120
10. Net indirect taxes 130

Solution

GDPMP = Final Consumption Expenditure + Gross Domestic Investment + Change

in Stock + Net Exports

= 1,000 + 500 + (300 – 100) + (700 – 200)

1,000 + 500 + 200 + 500 = Rs.2,200 lakhs

NNPFC = GDPMP – Depreciation + NFIA – Net Indirect Taxes

= 2,200 – 210 + 120 – 130 = Rs.1,980 lakhs.

Do It Yourself (DIY)
Q.1. From the data given below, calculate National Income;
Items Rs.(In crores)
1. Indirect taxes 125
2. Depreciation 100
3. Royalty 10
4. Profits 100
5. Subsidies 20
6. Gross domestic product at market price 900
7. Interest 25
8. Rent 50
9. Net factor income from abroad (-)20
Ans: Rs. 675

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Q.2. From the following data given below, calculate; (a) Operating Surplus, (b) Gross National
Product at Market Price.
Items Rs.(In crores)
1. Employer’s contribution to social security. 50
2. Depreciation 30
3. Wages and salaries 350
4. Interest 150
5. Subsidy 30
6. Royalty 20
7. Rent 30
8. Indirect taxes 90
9. Profits 120
10. Net factor income from abroad (-)10
Ans: (a) Rs. 320 (b) Rs. 800
Q.3. On the basis of following data, calculate; (a) National Income (b) Compensation of
Employees/
Items Rs.(In crores)
1. Net factor income from abroad 5
2. Depreciation 60
3. Bonus 40
4. Subsidies 5
5. Wages and salaries 400
6. Net domestic product at market price 700
7. Indirect taxes 50
8. Contribution to provident fund by employer 20
Ans: (a) Rs. 660 (b) Rs. 460

Q.4. On the basis of following data, calculate, National Income:

Items Rs.(In crores)
1. Wages and salaries 600
2. Net domestic product at market price 1000
3. Subsidies 10
4. Contribution to provident fund by employer 30
5. Net factor income from abroad (-)10
6. Bonus 60
7. Travelling expenses for business purposes 20
8. Indirect taxes 75
Ans: Rs. 925
Q.5. Calculate (a) Gross Domestic Product at market price and (b) Net national Product at factor
cost from the following data;
Items Rs.(In crores)
1. Consumption of fixed capital 34
2. Employers’ contribution to social security schemes 30
3. Rent 10
4. Interest 20
5. Profits 25
6. Royalty 5
7. Wages and salaries 170
8. Net indirect taxes 38
9. Net factor income from abroad (-)3
Ans: (a) Rs. 332 (b) Rs. 257

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Q.6. Calculate (a) Gross National Product at market price and (b) Net National product at factor
cost from the following data;
Items Rs.(In crores)
1. Net factor income from abroad (-)5
2. Net exports (-)7
3. Net indirect taxes 47
4. Net change in stock 13
5. Private final consumption expenditure 263
6. Government final consumption expenditure 50
7. Consumption of fixed capital 45
8. Gross domestic capital formation 100
Ans: (a) Rs. 401 (b) Rs. 309
Q.7. Find out (a) Gross Domestic Product at market price and (b) Net National Product at factor
cost from the following data;
Items Rs.(In crores)
1. Indirect taxes 65
2. Depreciation 45
3. Net factor income from abroad (-)5
4. Private final consumption expenditure 290
5. Net exports (-)20
6. Government final consumption expenditure 55
7. Gross domestic capital formation 120
8. Net change in stock 15
9. Subsidies 20
Ans: (a) Rs. 445 (b) Rs. 350
Q.8. Find out Operating Surplus from the following data;
Items Rs.(In crores)
1. Net value added at market price 430
2. Wages and salaries 300
3. Subsidies 10
4. Indirect taxes 40
Ans: Rs. 100

Q.9. Find Operating Surplus from the following data:

Items Rs.(In crores)
1. Gross value added at factor cost 100
2. Wages and salaries 30
3. Consumption of fixed capital 10
4. Employer’s contribution to social security scheme 3
5. Employees subscription to provident fund 2
Ans: Rs. 57
Q.10. Calculate Gross Value Added at factor cost from the following data;
Items Rs.(In crores)
1. Gross value of output at market price 10000
2. Depreciation 1000
3. Indirect taxes 750
4. Economic subsidies 250
5. Intermediate consumption 5000
6. Compensation of employees 2000
Ans: Rs. 4500
Q.11. From the following data, calculate National Income:
Items Rs.(In crores)
1. Compensation of employees 13300
2. Indirect taxes 3800
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3. Mixed income of self-employed 16100

4. Operating surplus 5000
5. Net factor income from abroad 300
6. Consumption of fixed capital 2200
Ans: Rs. 34700
Q.12. From the following data calculate NFIA:
Items Rs.(In crores)
1. NNP at MP 50000
2. Indirect taxes 1000
3. Subsidies 1200
4. Operating surplus 5000
5. Mixed income of self-employed 2000
6. Compensation of employees 15000
Ans: Rs. 28200
Q.13. Calculate GDPFC from the following data;
Items Rs.(In crores)
1. Value of intermediate consumption 250
2. Indirect taxes 40
3. Depreciation 50
4. Value of output 700
Ans: Rs. 410
Q.14. Estimate (a) Gross value added or GDPMP by primary, secondary and tertiary sectors, (b)
National Income (NNPFC).
Items Rs.(In crores)
1. Value of output of primary sector 800
2. Value of output of secondary sector 200
3. Value of output of tertiary sector 300
4. Value of intermediate inputs purchased by;
(a) Primary sector 400
(b) Secondary sector 100
(c) Tertiary sector 50
5. Indirect taxes by all sectors 50
6. Consumption of fixed capital of all sectors 80
7. Factor income received from rest of the world 10
8. Factor income paid to non-residents 20
9. Subsidies received by all sectors 20
Ans: (a) Rs. 750 (b) Rs. 630

Q.15. On the basis of the following information calculate: (a) Net value added at factor cost (b)
Gross domestic product at market price.
Items Rs.(In crores)
1. Operating surplus 2000
2. Wages and salaries 4000
3. Mixed income of self employed 1000
4. Net indirect tax 150
5. Depreciation 500
6. Rent 500
7. Interest 1000
Ans: (a) Rs. 7000 (b) Rs. 7650

Q.16. On the basis of information given below, calculate GDPmp:

Items Rs.(In crores)
1. Personal consumption expenditure 45000
2. [Link] consumption expenditure 5000

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3. Gross domestic fixed investment 5000

4. Increase in inventories 1000
5. Export of goods and services 6000
6. Import of goods and services 7000
7. Net indirect taxes 3500
8. Depreciation 4500
Ans: Rs. 55,000

Q.17. From the national accounts for the year 1990 at current prices we have the following
information. compute the value of (a) NNP at MP (b) GNP at MP (c) GNP at FC (d) NDP at
FC.
Items Rs.(In crores)
1. NDP at market price 80000
2. Net factor income from abroad (-)200
3. Depreciation 4950
4. Subsidies 1770
5. Indirect taxes 10600
Ans: (a) Rs79,800 (b) Rs 84,750 (c) Rs 75,920 (d) Rs 71,170

Q.18. The figures given below pertain to 1994 – 95. Compute (a) Depreciation, (b) Net factor
income from abroad, (c) Subsidies (d) NDP at factor cost.
Items Rs.(In crores)
1. GNP at factor cost 95000
2. Indirect taxes 14000
3. NDP at market price 100422
4. NNP at market price 100000
5. GNP at market price 107000
Ans: (a) Rs 7,000 (b) Rs -422 (c) Rs. 2,000 (d) Rs. 88,422

Q.19. From the given information, estimate GNPMP

Items Rs.(In crores)
1. GDP at FC 370
2. Net indirect taxes 60
3. NFIA (-)30
Ans: Rs. 400
Q.20. From the following data, calculate Net Indirect Taxes and NDPFC;
Items Rs.(In crores)
1. GDPMP 600
2. Operating surplus 50
3. Consumption of fixed capital 100
4. Wages and salaries 300
Ans: (a) Rs. 150 (b) Rs. 350

Q.21. Calculate the values of GNPMP and GNPFC.

Items Rs.(In crores)
1. Amount of the tea produced 2000
2. Market price of tea per kg. 100
3. Amount of coffee produced 1500
4. Market price of coffee per kg. 300
5. Value of other agricultural products. 600000
6. Value of industrial products 800000
7. Value of intermediate inputs. 300000
8. Net indirect taxes. 100000
Ans: (a) Rs 17,50,000 (b) Rs. 16,50,000

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Q.22. Calculate gross value added at factor cost from the following;
Items Rs.(In crores)
1. Gross value of output at market price 10000
2. Depreciation 1000
3. Indirect taxes 750
4. Subsidies 250
5. Intermediate consumption 5000
6. Compensation of employees 2000
Ans: Rs 4,500
Q.23. From the following given data determine the value of (a) GDPMP (b) GNPFC (c) NNPMP (d)
NNPFC.
Items Rs.(In crores)
1. Value of output 100000
2. Depreciation 6000
3. Indirect taxes 6000
4. Subsidies 1000
5. Intermediate consumption 24000
Ans: (a) Rs. 76,000 (b) Rs. 71,000 (c) Rs 70,000 (d) Rs. 65,000
Q.24. From the data given below find out the Net value added at factor cost.
Items Rs.(In crores)
1. Total Sales 500
2. Cost of intermediate inputs 200
3. Indirect taxes 175
4. Subsidies 25
5. Depreciation 50
Ans: Rs 100
Q.25. Calculate (a) National Income with the help of Income Method., (b) GDP at Factor Cost from
the data using Expenditure Method.
Items Rs.(In crores)
1. Private final consumption expend. 85
2. Net domestic fixed capital formation 25
3. Consumption of fixed capital 2
4. Closing stock 10
5. Opening stock 5
6. Govt. final consumption expend. 10
7. Net exports (-)5
8. Wages and salaries 80
9. Contribution of employers towards social security scheme 10
10. Operating surplus 20
11. Net factor income from ROW (-)5
12. Net indirect taxes 10
Ans: (a) Rs. 105 (b) Rs. 112

Q.26. From the data given below calculate (i) Gross Domestic product at Market Price by Income
Method. (ii) NI by Expenditure Method.
Items Rs.(In crores)
1. Compensation of employees 13000
2. Indirect taxes 3700
3. Gross fixed capital formation 6300
4. Interest, rent and profit 5000
5. Govt. final consumption expenditure 3400
6. Mixed income of self-employed 16000
7. Change in stock 1000
8. Imports 1800

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9. Exports 1700
10. Private final consumption expenditure 29000
11. Subsidies 300
12. Net factor income from abroad 250
13. Consumption of fixed capital 2200
Ans: (a) Rs. 39,600 (b) Rs. 34,250

Q.27. Calculate National Income on the basis of the following data;

Items Rs.(In crores)
1. Private final consp. expend. in domestic market. 750
2. Govt. final consp. expend. 100
3. Consp. of fixed capital 25
4. Net exports (-)25
5. Net factor income from abroad. (-)20
6. Gross fixed capital formation 300
7. Change in stock 50
8. Direct purchases abroad by resident households 50
9. Direct purchases by non-residents in the domestic market 5
10. Net indirect taxes 100
Ans: Rs 1030
Q.28. Calculate Gross Domestic Product at Market Price from the data;
Items Rs.(In crores)
1. Net value added at market price by
a. Primary sector 700
b. Secondary sector 1000
c. Tertiary sector 1000
2. Net exports (-)10
3. Net indirect taxes 100
4. Value of intermediate consumption in
a. Primary sector 100
b. Secondary sector 300
c. Tertiary sector 300
5. Consumption of fixed capital in
a. Primary sector 20
b. Secondary sector 50
c. Tertiary sector 30
Ans: Rs. 2,800
Q.29. Calculate (i) GDP at MP by Income Method and (ii) NNP at FC by Expenditure Method.
Items Rs.(In crores)
1. [Link] consp. expend. 100
2. Gross fixed capital formation 310
3. Operating surplus 800
4. Change in stock 50
5. Exports 40
6. Net factor income from abroad (-)10
7. Subsidies 20
8. Consumption of fixed capital 20
9. Imports 50
10. Compensation of employees 300
11. Mixed income of self employed 30
12. Indirect taxes 120
13. [Link]. expend. 800
Ans: (i) Rs. 1250 (ii) Rs. 1120

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Q.30. Calculate GDPMP and GNPMP by income method.

Items Rs.(In crores)
1. Compensation of employees 13363
2. Govt. final consumption expenditure 3801
3. Indirect taxes 3864
4. Gross fixed capital formation 6305
5. Mixed income of self employed 16112
6. Interest, rent and profit 5044
7. Subsidies 337
8. Net factor income from abroad (-)384
9. Consumption of fixed capital 2217
Ans: (a) Rs. 40,263 (b) Rs. 39,879

Q.31. Calculate GDPFC and National Income by Income Method.

Items Rs.(In crores)
1. Govt. Final consp. expend. 7351
2. Net indirect taxes 7714
3. Gross fixed capital formation 13248
4. Mixed income of the self employed 28267
5. Rent, interest, profits 9637
6. Consumption of fixed capital 4046
7. NFLA (-)255
8. Compensation of employees 24420
Ans: (a) Rs. 66,370 (b) Rs. 62,069
Q.32. Calculate GDPMP GDPFC and GNPFC by Expenditure Method.
Items Rs.(In crores)
1. Compensation of employees 24420
2. Govt. final consp. expend 7351
3. Private final consp. expend. 51177
4. Exports 4812
5. Imports 5664
6. Gross fixed capital formation 13248
7. Change in stock 3170
8. NFIA (-)255
9. [Link] fixed capital 4046
10. Indirect taxes 8834
11. Subsidies 1120
Ans: (a) Rs. 74,094 (b) Rs. 66,380 (c) Rs. 66,125
Q.33. Find the Value of Output and GVA at MP from the following data.
Items Rs.(In crores)
1. Purchase of intermediate inputs 200
2. [Link] fixed capital 50
3. Indirect taxes 75
4. Subsidies 25
5. Wages and salaries 400
6. Rent 60
7. Interest 40
8. Profits 100
9. Sales 800
10. Change in stock 100
Ans: (a) Rs. 900 (b) Rs. 700

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Q.34. Find out (i) NDP at Factor Cost by Expenditure method and (ii) GDP at Market Price by
Income Method for the data given below;
Items Rs.(In crores)
1. Gross fixed capital formation 130
2. Private final consumption expenditure 510
3. Mixed income of the self employed 280
4. Net factor income from rest of the world (-)5
5. Exports 50
6. Imports 60
7. Compensation of employees 240
8. Govt. final consumption expenditure 70
9. Consumption of fixed capital 40
10. Indirect taxes 90
11. Subsidies 10
12. Rent, interest and profits 90
13. Change in stock 30
14. Interest on national debt. 10
Ans: (a) Rs. 610 (b) Rs. 730
Q.35. Calculate GNP at MP;
Items Rs.(In crores)
1. Interest 25
2. Net factor income from abroad (-)5
3. Net indirect taxes 40
4. Royalty 5
5. Wages and salaries 240
6. Depreciation 50
7. Profits 30
8. Rent 10
Ans: Rs. 395
Q.36. Calculate National Income by Income Method from the given data;
Items Rs.(In crores)
1. Compensation of employees 13300
2. Wages in kind 200
3. Indirect taxes 3800
4. Gross domestic fixed capital formation 6200
5. Operating surplus 5000
6. Mixed income of self employed 16100
7. Net factor income from abroad 300
8. Net exports (-)100
Ans: Rs. 34,700

Q.37. Calculate GDPMP from the given data;

Items Rs.(In crores)
1. Personal consumption expenditure 45000
2. Govt. final [Link]. 5000
3. Gross domestic fixed investment 5000
4. Increase in inventories 1000
5. Export of goods and services 6000
6. Import of goods and services 7000
7. Net indirect taxes 3500
8. Depreciation 4500
Ans: Rs. 55,000

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Q.38. Calculate GDP at Market Price by the (i) Income and (ii) Expenditure Methods from the
following data;
Items Rs.(In crores)
1. Compensation of employees 13363
2. Govt. final consumption. Expenditure. 3801
3. Indirect taxes 3864
4. Gross fixed capital formation 6305
5. Mixed income of self employed 16112
6. Interest, rent and profit 5044
7. Change in stock 1039
8. Export of goods and services 1771
9. Import of goods and services 1816
10. Private final consumption expenditure 29163
11. Net factor income from abroad (-)284
12. Subsidies 337
13. Consumption of fixed capital 2217
Ans: (a) Rs. 40,263 (b) Rs. 40,263
Q.39. From the data given below calculate National Income by (i) Income Method (ii) Expenditure
Method and (ii) GNPFC.
Items Rs.(In crores)
1. Govt. final consumption expenditure. 7341
2. Indirect taxes 8834
3. Gross fixed capital formation 13248
4. Mixed income of self employed 29267
5. Subsidies 1120
6. Change in stock 3170
7. Rent, interest and profit 9637
8. Consp. of fixed capital 4046
9. Private final consumption expend. 51177
10. Exports of goods and services 4812
11. Net factor income earned from abroad (-)255
12. Compensation of employees 23420
13. Import of goods and services 5664
Ans: (a) Rs. 62,069 (b) Rs. 62,069 (c) Rs. 66,115
Q.40. With the help of the information given below estimate GNP at MP;
Items Rs.(In crores)
1. Pvt. final consumption expend 50000
2. Govt. final consumption expend. 15000
3. Gross fixed capital formation 10000
4. Increase in stock 2000
5. Export of goods and services 5000
6. Import of goods and services 7000
7. Capital consumption allowance 6500
8. Net indirect taxes 5000
9. Net factor income from abroad (-)3000
Ans: Rs 72,000
Q.41. From the information given below calculate (i) GDP at FC and (ii) National Income;
Items Rs.(In crores)
1. Depreciation 1000
2. Govt. final consp. expend. 3650
3. Exports 1500
4. Imports 2000
5. Indirect taxes 500
6. Households final consp. expend. 4980

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7. Change in stock 365

8. Gross fixed capital formation 1235
9. Economic subsidies 800
10. Net factor income earned from abroad. 200
Ans: (a) Rs. 10,030 (b) Rs. 9,230
Q.42. Calculate National Income by Income and Expenditure Method from the following data;
Items Rs.(In crores)
1. Govt. final consumption expenditure 50
2. Operating surplus 300
3. Opening stock 20
4. Private final consumption expenditure 500
5. Gross fixed capital formation 90
6. Closing stock 35
7. Net exports (-)5
8. Net indirect taxes 60
9. Compensation of employees 220
10. Consumption of fixed capital 20
11. Mixed income of self employed 50
12. Net factor income from abroad. 20
Ans: Rs 590 from both method
Q.43. Find Net Domestic Product at Market Price from the following data;
Items Rs.(In crores)
1. Consumption of fixed capital 50
2. Net indirect taxes 30
3. Value of output 750
4. Value of intermediate consp. 300
Ans: Rs 400
Q.44. Calculate Net Value Added at Market Price from the following data;
Items Rs.(In crores)
1. Subsidies 1
2. Sales 100
3. Closing stock 10
4. Indirect taxes 5
5. Intermediate consumption 30
6. Opening stock 20
7. Consumption of fixed capital 15
Ans: Rs. 45
Q.45. Calculate (i) GNP at MP by Expenditure Method and (ii) GDP at MP by Income Method:
Items Rs.(In crores)
1. Private final consumption expenditure 200
2. Government final consumption expenditure 20
3. Gross domestic capital formation 40
4. Net exports (-)5
5. Wages and salaries 165
6. Employer’s contribution to social security schemes 10
7. Profits 15
8. Interest 20
9. Subsidies 5
10. Indirect taxes 30
11. NFIA 5
12. Consumption of fixed capital 5
13. Rent 15
Ans: (a) Rs. 260 (b) Rs. 255

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Q.46. Find out Net Value Added at Factor Cost by an enterprise on the basis of following data;
Items Rs.(In crores)
1. Consumption of raw materials 150
2. Value of output 600
3. Excise duty 60
4. Sales tax 60
5. Depreciation 30
Ans: Rs. 300
Q.47. From the given data for a firm find out Net Value Added at Factor Cost;
Items Rs.(In crores)
1. Total sales 75000
2. Purchase of raw materials and other inputs 30000
3. Indirect taxes 7500
4. Consumption of fixed capital 2500
Ans: Rs. 35,000
Q.48. Calculate: (i) Gross Value Added at Factor Cost (ii) Value of Gross Product, (iii) Value of Net
Product at Market Price, (iv) Net Value Added at Factor Cost:
Items Rs.(In crores)
1. Value of output 800
2. Cost of intermediate goods and services 600
3. Wages and salaries 100
4. Dividend 10
5. Indirect tax (net) 25
6. Depreciation 5
7. Retained profit 60
Ans: (i) Rs. 175 (ii) Rs. 200 (iii) Rs. 195 (iv) Rs. 170
Q.49. Gross national product at market price is Rs.2000 crores and the capital stock is worth
Rs.4000 crores. The capital stock depreciates at 12.5% per annum. Factor income from abroad
is Rs.400 crores and to abroad is Rs.600 crores. Indirect taxes amount to Rs.200 crores and
subsidies are Rs.30 crores. Find out:
(i) NDP at MP
(ii) NDP at FC

Ans: (i) Rs. 1700 (ii) Rs. 1530

Q.50. From the data given below, calculate; (i) National Income with the help of Income Method
and (ii) Gross Domestic Product at Factor Cost with the help of Expenditure Method:
Items Rs.(In crores)
1. Private final consumption expenditure 85
2. Net domestic fixed capital formation 25
3. Consumption of fixed capital 2
4. Closing stock 10
5. Opening stock 5
6. Government final consumption expenditure 10
7. Net exports (-)5
8. Wages and salaries 90
9. Contribution of employers towards social security 10
10. Operating surplus 20
11. Net factor income received from the rest of the world. 5
12. Net indirect taxes 10
Ans: (i) Rs. 125 (ii) Rs. 112

Dr. Santosh Rai Institute Page 45

 Methods & Measurement of National Income
>
By PIYUSH JOSHI

Q.51. From the data given below, calculate (i) Gross National Product at Market price by
Expenditure Method and (ii) Gross Domestic product at Market price by Income Method.
Items Rs.(In crores)
1. Private final consumption expenditure 200
2. Government final consumption expenditure 20
3. Gross domestic capital formation 40
4. Net exports (-)5
5. Wages and salaries 165
6. Employer’s contribution to social security schemes 10
7. Profits 15
8. Interest 20
9. Indirect taxes 30
10. Subsidies 5
11. Rent 15
12. Net factor income from abroad 5
13. Consumption of fixed capital 5
Ans: (i) Rs. 260 (b) Rs. 255
Q.52. From the following data, calculate ‘national income’ by (a) income method and (b)
expenditure method;
Items Rs.(In crores)
1. Interest 150
2. Rent 250
3. Government final consumption expenditure 600
4. Private final consumption expenditure 1200
5. Profits 640
6. Compensation of employees 1000
7. Net factor income to abroad 30
8. Net indirect taxes 60
9. Net exports (-)40
10. Consumption of fixed capital 50
11. Net domestic capital formation 340
Ans: Rs. 2,070 by both the method

Q.53. From the following data, calculate National Income by Income and Expenditure method;
Items Rs.(In crores)
1. Government final consumption expenditure 100
2. Subsidies 10
3. Rent 200
4. Wages and salaries 600
5. Indirect tax 60
6. Private final consumption expenditure 800
7. Gross domestic capital formation 120
8. Social security contributions by employers 55
9. Royalty 25
10. Net factor income paid to abroad 30
11. Interest 20
12. Consumption of fixed capital 10
13. Profit 130
14. Net exports 70
15. Change in stock 50
Ans: Rs. 1,000 by both the method

Dr. Santosh Rai Institute Page 46

 Methods & Measurement of National Income
>
By PIYUSH JOSHI

Q.54. There are only two producing sectors A and B in an economy. Calculate (a) Gross value
added at market price by each sector, (b) National Income.
Items Rs.(In crores)
1. Net factor income from abroad 20
2. Sales by A 1000
3. Sales by B 2000
4. Change in stock of B (-)200
5. Closing stock of A 50
6. Opening stock of A 100
7. Consumption of fixed capital by A and B 180
8. Indirect taxes paid by A and B 120
9. Purchases of raw materials [Link] A 500
10. Purchases of raw materials, etc. by B 600
11. Exports by B 70
Ans: (a) Rs. 1,720 (b) Rs. 1,440

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Dr. Santosh Rai Institute Page 47