Fill in the blanks with appropriate alternatives given in the brackets. Chapter 9 - National Income

Chapter 9 - National Income

Economics Solutions for Class 12 Commerce Economics

Fill in the blanks with appropriate alternatives given in the brackets.

1) National income is the subject matter of _________ Economics. (Micro / Macro/ Managerial / Business).

2) GDP (FC) = GDP (MP) – __________ (factor cost/indirect taxes/depreciation/subsidy)

3) In India, the responsibility for the calculation of national income rests with _________. (World Bank/International Monetary Fund/Central Statistical Organization/International Labour Organisation)

4) National income is __________ concept. (stock/final/intermediate/flow)

5) Paper purchased by a publisher is __________. (intermediate good/final good/consumer good/service)

Answer: 

1) National income is the subject matter of Macro Economics.

Explanation:

Macroeconomics focuses on how income levels are determined in the economy. Also, it studies the causes behind fluctuations in the income levels and accordingly what strategies can be adopted to accelerate growth in national income. Thus, national income is the subject matter of macroeconomics.

2) GDPFC = GDPMP −  Net Indirect Taxes

Explanation:

Market price (MP) includes indirect taxes levied by the government on different goods and services and subsidies. These should be deducted from it to get the actual factor price. In other words,when the Gross Domestic Product (GDP) is expressed in terms of factor costs, the impact of subsidies and indirect taxes is not taken into consideration. Thus,
GDPFC = GDPMP− Net Indirect Taxes
GDPFC = GDPMP− (Indirect Taxes − Subsidies)

3) In India, the responsibility for the calculation of national income rests with Central Statistical Organization.

Explanation:

In the year 1955, the responsibility of calculation of national income was given to the Central Statistical Organisation (CSO).

4) National income is flow concept.

Explanation:

National income is a flow concept. This is because it refers to the flow of final goods and services in an economy.

5) Paper purchased by a publisher is an intermediate good.

Explanation:

Intermediate goods are the goods which are used as a raw material in the production of final goods Accordingly, paper purchased by a publisher is an intermediate good. This is because the publisher would then further use the paper for the books he will publish.

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