(i) No, it is not included while estimation of National Income as it is not a factor income.= Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Capital Formation – Net Imports – Net Indirect Taxes – Consumption of Fixed Capital + Net Factor Income from AbroadAns.
In your basic accounts lessons, you must have learned the concepts of National income or the gross national income is the total income earned by all residents and enterprises of a country over a specific period. The NCERT solutions for the CBSE Class 12 Commerce Economics chapter National Income Accounting at TopperLearning are complete solutions to questions in the CBSE-recommended book. Investment expenditure refers to the expenditure made by companies and production units for raising capital (I). The term “national income” refers to the total monetary value of all the final goods and services produced by a nation during a certain period of a time period (usually a year). Definition of National Income: National income of a country means the sum total of incomes earned by the citizens of that country during a given period, say a year. Users can download CBSE guide quick revision notes from myCBSEguide mobile app and my CBSE guide website.Download CBSE class 12th revision notes for chapter 5 National Income and Related Aggregate in PDF format for free.
Now, this includes the interest paid when a company takes a loan for an investment. Join courses with the best schedule and enjoy fun and interactive classes. 2. However, while computing national income using the income approach, economists exclude transfer payments such as gifts and donations and profits from the sale of pre-owned goods. However, it should be kept in mind that it includes the effect of inflation and as such comparison across quarters or years warrants adjustments in terms of the rate of inflation so that the national income is compared in the right way. Circular Flow Of Income And Methods Of Calculating National Income. And finally, the expenditure method focuses on the various types of expenditure based on consumption and investment. National income or the gross national income is the total income earned by all residents and enterprises of a country over a specific period. Calculate the national income of the country based on the given information. Similarly, when a family invests in a property or a house, they take a loan from a bank and pay an interest for the same while repaying the loan over a period of time. (i) Imputed rent of self occupied houses are included while estimating National Income, as it is a factor income.Ans. Employers Contribution of Social security Schemes3. Circular Flow of Income and Methods of Calculating National Income Mathematically, it is represented as,Let’s take an example to understand the calculation of the National Income in a better manner.National Income of Nation is calculated using the formula given belowTherefore, the national income of the nation stood at $25 trillion during the year.National Income of the nation is calculated using the formula given belowTherefore, the country managed national income of $3,300 billion during the year.The formula for national income can be derived by using the following steps:It is important to understand the concept of national income because economists use it as an alternative to compare a nation’s performance across different quarters of the year or same quarters of different years.
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