If C = ₹2,000, I = ₹600, G = ₹500, X = ₹300, M = ₹450, depreciation = ₹200, net indirect tax = ₹250, and NFIA = −₹50, what is national income?
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Answer and explanation
Correct answer: ₹2,450
First calculate GDP at market price: GDPMP = C + I + G + (X − M) = 2,000 + 600 + 500 + (300 − 450) = ₹2,950. National income is NNP at factor cost, so subtract depreciation and net indirect tax and add NFIA: ₹2,950 − ₹200 − ₹250 + (−₹50) = ₹2,450. Hence option A is correct.
Frequently asked questions
What is the correct answer to this question?
₹2,450
Why is this the correct answer?
First calculate GDP at market price: GDPMP = C + I + G + (X − M) = 2,000 + 600 + 500 + (300 − 450) = ₹2,950. National income is NNP at factor cost, so subtract depreciation and net indirect tax and add NFIA: ₹2,950 − ₹200 − ₹250 + (−₹50) = ₹2,450. Hence option A is correct.
Which subject and chapter does this question cover?
This is a Class 11 Economics question. Chapter: National Income and Related Aggregates. Topic: GDP and Welfare.
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