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Given the following data (Rs. in crore)
a. Gross national product at factor cost - 6,150
b. Net exports - (-)50
c. Compensation of employees - 3,000
d. Rent - 800
e. Interest - 900
f. Undistributed Profit - 1,300
g. Net indirect taxes - 300
h. Net domestic capital formation - 800
i. Gross fixed capital formation - 850
j. Change in stock - 50
k. Dividend - 300
l. Factor income to abroad - 80
1. calculate Net Domestic Product at factor cost
2. Gross Domestic Product at Market Price
Solution:
1. NDP at factor cost = Compensation of employees + Rent + Interest + Undistributed Profit + Dividend + Mixed income
= Rs 3,000 crore + Rs 800 crore + Rs 900 crore + Rs 1,300 crore + Rs 300 crore
= Rs 6,300 crore
2. Gross Domestic Product at Market Price = NDP at factor cost + Net Indirect taxes + Consumption of fixed capital (depreciation)
= Rs 6,300 crore + Rs 300 crore + (Rs 850 crore + Rs 50 crore - Rs 800 crore)
= Rs 6,300 crore + Rs 300 crore+ Rs 100 crore
= Rs 6,700 crore
Note: Consumption of fixed capital (depreciation) = Gross fixed capital formation + Change in stock – Net domestic capital formation
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From the following data,
Sales - Rs. 11000
Change in stock - Rs. 680
Intermediate Consumption - Rs. 2370
Depreciation - Rs. 450
Wages and salaries - Rs. 5400
Interest - Rs. 250
Rent - Rs. 750
Profit - Rs. 2150
Net indirect Taxes - Rs. 310
Students scholarship - Rs 75
1. Calculate the net value added at factor cost
2. Calculate the Sum of Factor Incomes
Solution :
1. Net Value added at Factor Cost = Sales + increase in stock – Intermediate Consumption – Depreciation - Net Indirect Taxes
= 11000 + 680 - 2370 - 450 - 310
= Rs. 8550
2. Sum of Factor Incomes = Wages & salaries + Interest + Rent + Profit
= 5400 + 250 + 750 + 2150
= Rs 8550
Hence shown, Net Value added at Factor Cost = Sum of Factor Incomes = Rs 8550
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From the following data (Rs. in Crores),
Net Domestic capital formation - 500
Compensation of employees - 1850
Consumption of fixed capital (Depreciation) - 100
Govt. Final Expenditure - 1100
Private Final consumption Expenditure - 2600
Rent - 400
Dividend - 200
Interest - 500
Net Exports - (-) 100
Undistributed Profits - 900
Net Factor Income From Abroad (income from abroad – income to abroad) - (-) 50
Net Indirect Taxes (indirect Tax – Subsidy) - 250
1. Calculate GNP at factor cost by Income Method
2. Calculate GNP at factor cost by Expenditure Method
Solution :
1. Income Method
GNPFC = (Compensation of employees + Rent + Interest + Undistributed Profits + Dividend) + Net Factor Income from Abroad + Consumption of fixed capital
= 1850 + (400 +500 +900 + 200) + (-) 50+ 100
= 3900 Crore
Note:
o GNPFC = NNPFC + Consumption of fixed capital
o NNPFC or National Income = Compensation of employees + Rent + Interest + Undistributed Profits + Dividend + Net Factor Income from Abroad
o Compensation of employees is income from work which includes wages and salaries in kind and cash, and contribution to social securities
2. Expenditure Method
GNPFC = GNPMP - Net Indirect Taxes
Private Final consumption Expenditure + (Net Domestic capital formation + consumption of fixed capital) + Govt. Final consumption Expenditure + Net Exports + Net Factor Income from Abroad - Net Indirect Taxes
= 1100 +2600 + (500 +100) + (-) 100 + (-)50 – 250
= 3900 Crore
Note
o GNPMP = Private Final consumption Expenditure + Gross Domestic capital formation + Govt. Final consumption Expenditure + Net Export + Net Factor Income from Abroad
o Gross Domestic capital formation = Net Domestic capital formation + Consumption of fixed capital)
o Export – Import = Net Export
o Net Factor Income from Abroad = Factor Income from Abroad – Factor Income Paid to Abroad
o GNPFC = GNPMP - Indirect tax + Subsidy
= GNPMP - (Indirect tax – subsidy)
= GNPMP - Net Indirect tax
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In a survey of 150 people in a city, it was found that there were 50 smokers. Calculate the following based on the above data.
1. The estimate of population proportion
a. 0.3333
b. 0.5
c. 0.6666
d. 1.0
2. Estimated standard error of population
a. 0.0015
b. 0.2211
c. 0.0385
d. 0.4725
3. Binominal standard deviation of population
a. 1.76
b. 2.26
c. 5.77
d. 7.87
4. 95% confidence interval level of population proportion
a. 0.4326, 0.2340
b. 0.5468, 0.3178
c. 0.4088, 0.2578
d. 0.5568, 0.2778
5. 99% confidence interval level of population proportion
a. 0.4326, 0.2340
b. 0.5468, 0.3178
c. 0.4088, 0.2578
d. 0.5568, 0.2778
Ans - 1-a, 2-c, 3-c, 4-c, 5-a
Solution :
1. P = 50/150 = 0.3333
2. Estimated standard error = sqrt [P (1-P) / n]
P = 0.3333
1-P = 1 - 0.3333 = 0.6666
n = 150
So, sqrt [P (1-P) / n] = sqrt [0.3333 x 0.6666 / 150]
= sqrt (0.2222 / 150)
= sqrt (0.00148)
σx = 0.0385
3. Binominal standard deviation = √n*p*q
= √150*.333*.666
= √33.27
= 5.77
4. Level of Confidence and their Multiplier Number (z*) (Commonly used)
99% - 2.58
95% - 1.96
90% - 1.645
95% confidence interval = P +/- (1.96 (σx))
= 0.3333 + (1.96 x 0.0385)
= 0.3333 + 0.0755
= 0.4088
and
= 0.3333 - (1.96 x 0.0385)
= 0.3333 - 0.0755
= 0.2578
5. 99% confidence interval = P +/- (2.58 (σx))
= 0.3333 + (2.58 x 0.0385)
= 0.3333 + 0.0993
= 0.4326
and
= 0.3333 - (2.58 x 0.0385)
= 0.3333 - 0.0993
= 0.2340
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If 6 out of 40 students plan to go to graduate school, calculate
1. Estimated proportion of all students who plan to go to graduate school
a. 0.10
b. 0.15
c. 0.20
d. 0.25
2. The standard error of this estimate
a. 0.0385
b. 1.0645
c. 0.0565
d. 1.0396
3. Binominal standard deviation of Population
a. 1.76
b. 2.26
c. 5.77
d. 7.87
4. 90% confidence interval level
a. 0.4326, 0.2340
b. 0.2429, 0.0571
c. 0.3489, 0.1576
d. 0.2607, 0.0393
5. 95% confidence interval level
a. 0.4326, 0.2340
b. 0.2429, 0.0571
c. 0.3489, 0.1576
d. 0.2607, 0.0393
Ans - 1-b, 2-c, 3-b, 4-b, 5-d
Solution :
1. P = 6/40 = 0.15
2. Estimated standard error = sqrt [P (1-P) / n]
P = 0.15
1-P = 1 - 0.15 = 0.85
n = 40
So, sqrt [P (1-P) / n] = sqrt [0.15 x 0.85 / 40]
= sqrt (0.1275 / 40)
= sqrt (0.00319)
σx = 0.0565
3. Binominal standard deviation = √n*p*q
= √40*.15*.85
= √5.1
= 2.26
4. Level of Confidence and their Multiplier Number (z*) (Commonly used)
99% - 2.58
95% - 1.96
90% - 1.645
90% confidence interval = P +/- (1.645 (σx))
= 0.15 + (1.645 x 0.0565)
= 0.15 + 0.0929
= 0.2429
and
= 0.15 - (1.645 x 0.0565)
= 0.15 - 0.0929
= 0.0571
4. 95% confidence interval = P +/- (1.96 (σx))
= 0.15 + (1.96 x 0.0565)
= 0.15 + 0.1107
= 0.2607
and
= 0.15 - (1.96 x 0.0565)
= 0.15 - 0.1107
= 0.0393
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Total expenditure of a government budget is Rs. 75,000 crore and total receipts is Rs. 45,000 crore. How much is the budget deficit?
a. Rs. 30,000 crore
b. Rs. 45,000 crore
c. Rs. 75,000 crore
d. Rs. 1,20,000 crore
Ans - a
Solution :
Budget Deficit = Total expenditure - Total receipts
= Rs. 75,000 crore – Rs. 45,000 crore
= Rs. 30,000 crore
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Calculate budgetary deficit from following data (Rs. in crore) :
(i) Revenue expenditure - 60,000
(ii) Capital expenditure - 30,000
(iii) Revenue receipts - 50,000
(iv) Capital receipts - 25,000
a. Rs. 15,000 crore
b. Rs. 25,000 crore
c. Rs. 50,000 crore
d. Rs. 55,000 crore
Ans - a
Solution :
Budgetary Deficit = Revenue expenditure + Capital expenditure - (Revenue receipts + Capital receipts)
= Rs. 60,000 crore + Rs. 30,000 crore – Rs. 50,000 crore – Rs. 25,000 crore
= Rs. 90,000 crore – Rs. 75,000 crore
= Rs. 15,000 crore
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Given the following data (Rs. in lakh), Calculate :
(i) Borrowing by the government - 600
(ii) Revenue receipts - 100
(iii) Capital receipts - 750
(iv) Interest payment by the government - 150
1. Fiscal deficit
a. Rs. 150 lakh
b. Rs. 300 lakh
c. Rs. 450 lakh
d. Rs. 600 lakh
2. Primary Deficit
a. Rs. 150 lakh
b. Rs. 300 lakh
c. Rs. 450 lakh
d. Rs. 600 lakh
Ans - 1-d, 2-c
Solution :
1. Fiscal Deficit = Borrowing by the government
= Rs. 600 lakh
2. Primary Deficit = Fiscal deficit - Interest payment by the government
= Rs. 600 lakh - Rs. 150 lakh
= Rs. 450 lakh
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