Aggregates related to national income - NDP

Correct answer: A. NDP rises by ₹720 crore and NFIA falls by ₹150 crore

Explanation: Domestic product is based on production within the domestic territory, not on the nationality of the producer. Therefore, the company’s entire net value added of ₹720 crore is included in India’s NDP. Profit sent to foreign owners is a factor payment from India to abroad, so it reduces India’s net factor income from abroad by ₹150 crore. It is not deducted from domestic product itself.

Correct answer: C. ₹8,750 crore

Explanation: Net factor income from abroad is NFIA = factor income received from abroad − factor income paid to foreigners = 610 − 760 = −₹150 crore. The relationship is NNP = NDP + NFIA. Therefore, NDP = NNP − NFIA = 8,600 − (−150) = ₹8,750 crore. Since NFIA is negative, NDP is ₹150 crore higher than NNP; simply choosing ₹8,600 ignores the foreign-income adjustment.

Correct answer: A. ₹3,90,000 / 3 lakh 90 thousand rupees

Explanation: The governing concept is net value added: value of output minus intermediate consumption and depreciation. Imputed rent is treated as the output of owner-occupied housing. Therefore, NVA = ₹5,00,000 − ₹75,000 − ₹35,000 = ₹3,90,000. Option B subtracts depreciation only, while Option C subtracts only maintenance; Option D adds an amount instead of making both required deductions.

Correct answer: C. ₹2,00,000

Explanation: The governing principle is that resale of an old good is not current production, so the machine’s ₹24 lakh sale value is excluded. However, the agent’s brokerage and the repairer’s service are newly produced services in the current period. Their contribution is ₹85,000 + ₹1,15,000 = ₹2,00,000. Therefore, Option C is correct; Options A and B omit one service, while D includes the old machine.

Correct answer: A. ₹9 lakh

Explanation: The income method includes factor incomes generated by current production, such as compensation for current labour. The ₹9 lakh salary qualifies. Lottery winnings are a transfer or windfall receipt, not payment for production, and the rise in the price of old shares is a capital gain rather than current factor income. Thus, only ₹9 lakh is included, making Option A correct.

Correct answer: A. About 1.85% fall

Explanation: Real per-capita NDP equals real NDP divided by population, so growth rates must be combined as a ratio, not simply subtracted when an exact result is requested. The factor is 1.06 ÷ 1.08 = 0.98148; change = 0.98148 − 1 = −0.01852, or approximately a 1.85% fall. Thus, Option A is correct; 2% is only a rough subtraction.

Correct answer: A. 5.77%

Explanation: Real per-capita NDP is obtained by dividing real NDP by population. Therefore, its exact growth factor is 1.10 ÷ 1.04. The percentage change is (1.10 ÷ 1.04 − 1) × 100 = 5.7692%, approximately 5.77%. Option B, 6%, comes from simple subtraction and is only a rough approximation; Options C and D ignore the population denominator.

Correct answer: C. 390 crore rupees

Explanation: The relationship is NDP at market price = NDP at factor cost + indirect taxes − subsidies. Since the two NDP measures are equal, net indirect taxes must be zero. Therefore, indirect taxes equal subsidies: 390 − subsidies = 0, so subsidies = 390 crore rupees. Hence, option C is correct; zero would be wrong because taxes are given as positive.

Correct answer: A. 42.86 percent

Explanation: Per capita NDP equals total real NDP divided by population. Let the second population be P; the first is 1.75P. Since total real NDP is equal, the first per capita value is 1/1.75 = 0.5714 times the second. Therefore, its shortfall is 1 − 0.5714 = 0.4286, or approximately 42.86%. Option B gives the remaining level, not the percentage reduction.

Correct answer: B. It will remain unchanged

Explanation: Real per capita NDP is calculated as real NDP divided by population. Real NDP increases by (13,860 − 12,600)/12,600 × 100 = 10%. Population also increases by (154 − 140)/140 × 100 = 10%. Thus the numerator and denominator rise in the same proportion, so their ratio remains unchanged. Hence option B is correct; a 10% rise in both does not create a per-capita increase.

Correct answer: C. 11680 crore rupees

Explanation: Use net indirect taxes = indirect taxes − subsidies = 1,040 − 420 = ₹620 crore. Convert NDP at market price to NDP at factor cost: 11,400 − 620 = ₹10,780 crore. Add net factor income from abroad to obtain NNP at factor cost: 10,780 + 310 = ₹11,090 crore. Finally add depreciation to convert net national product into gross national product: 11,090 + 590 = ₹11,680 crore, so C is correct.

Correct answer: B. 13990 crore rupees

Explanation: First convert GNP at market price to NNP at market price by subtracting depreciation: 15,200 − 900 = ₹14,300 crore. Net factor income from abroad is 520 − 740 = −₹220 crore, so NDP at market price is NNPMP − NFIA = 14,300 − (−220) = ₹14,520 crore. Net indirect taxes equal 840 − 310 = ₹530 crore. Therefore NDP at factor cost = 14,520 − 530 = ₹13,990 crore, option B.

Correct answer: A. 3.70 percent

Explanation: Real NDP per capita equals real NDP divided by population. With a 12% output increase and an 8% population increase, the exact growth factor is 1.12 ÷ 1.08 = 1.037037. Hence per-capita real NDP rises by about 3.70%, making option A correct. Subtracting 8 from 12 gives only a rough approximation of 4%.

Correct answer: C. When net factor income from abroad is zero

Explanation: National income is NNP at factor cost, while NDP at factor cost is a domestic measure. The relationship is National Income = NDP at factor cost + net factor income from abroad. Consequently, the two aggregates are equal when NFIA is zero. Option C is correct; depreciation and indirect taxes concern other conversions, and imports alone do not determine this equality.

Correct answer: A. It mainly deducts depreciation of produced fixed capital

Explanation: Conventional NDP is obtained by subtracting consumption of produced fixed capital, such as machinery and buildings, from GDP. It generally does not make a complete deduction for the loss of forests, minerals, groundwater, or other natural assets. Consequently, it can overstate sustainable output. Environmental accounting or green-NDP adjustments are needed to reflect resource depletion more fully.

Correct answer: A. Due to pollution inequality or decline in unpaid services

Explanation: NDP per capita is an average measure of net marketed output; it is not a complete measure of welfare. Welfare can decline if higher production causes pollution, if income becomes more unequal, or if unpaid household and community services deteriorate. Thus, a rise in the average does not guarantee better quality of life. Production is not always harmful, and the other alternatives are unsupported generalisations.

Correct answer: D. ₹21,500 crore

Explanation: National income is NDP at factor cost. To return from national to domestic, subtract NFIA: NDP at factor cost = ₹20,000 − (−₹500) = ₹20,500 crore. To convert factor cost to market price, add net indirect taxes: ₹20,500 + ₹1,000 = ₹21,500 crore. Therefore, option D is correct. The negative NFIA must be handled carefully; subtracting a negative amount increases the domestic figure.

Correct answer: C. ₹23,000 crore

Explanation: National income is NNP at factor cost. To obtain NDP at factor cost, subtract NFIA because national = domestic + NFIA: ₹22,500 − ₹600 = ₹21,900 crore. Then convert factor cost to market price by adding net indirect taxes: ₹21,900 + ₹1,100 = ₹23,000 crore. Hence option C is correct; the order keeps the domestic and valuation adjustments distinct.

Correct answer: B. −₹450 करोड़

Explanation: For comparable NDP measures, net indirect taxes = NDP at market price − NDP at factor cost. Substitution gives ₹17,200 − ₹17,650 = −₹450 crore. Therefore option B is correct. The negative result means subsidies exceed indirect taxes by ₹450 crore. A positive ₹450 crore would result from reversing the subtraction, while zero would incorrectly assume the two measures are equal.

Correct answer: D. ₹27,750 crore

Explanation: National income is NNP at factor cost. To obtain NDP at factor cost, subtract NFIA from national income: ₹25,800 − (−₹700) = ₹26,500 crore. A negative NFIA is therefore added in numerical effect. Next convert factor cost to market price by adding net indirect taxes: ₹26,500 + ₹1,250 = ₹27,750 crore. Hence option D is correct.