1.

The following information is extracted from the National Income Accounts of an economy:
Particulars Million Units of
Currency (MUC)
Depreciation 590
Government expenditure 2,970
Corporate taxes 720
Gross domestic investment 3,195
Transfer payments 695
Personal taxes 2,025
Net income earned from abroad 110
Retained earnings 1,500
Consumption expenditure 20,000
If the national income is 25,000 MUC, the personal savings in the economy is
(a) 1,040 MUC (b) 420 MUC (c) 1,450MUC (d) 3,230 MUC (e) 4,440 MUC.

2. The following data is taken from National Income Accounts of a country:

Particulars Rs. (Crore)
GNP at market prices 3,400
Transfer payments 484
Indirect taxes 346
Consumption of capital 380
Undistributed corporate profits 56
Corporate tax 150
Subsidies 40
Personal disposable income 2,586
Personal tax payments are
(a) Rs.786 Crore (b) Rs.712 Crore (c) Rs.612 Crore
(d) Rs.556 Crore (e) Rs.406 Crore.
3. The following information is extracted from the National Income Accounts of an economy.
Particulars MUC
NDP at market prices 20,000
NNP at factor cost 16,800
Gross domestic investment 3,200
Corporate profits (profit before tax) 3,000
Subsidies 400
Net domestic investment 2,600
Corporate profit tax 1,400
Personal tax payments 1,400
Indirect taxes 3,800
Factor income paid abroad 500
What is the factor income received from abroad?
(a) –300 MUC (b) 300 MUC (c) –700 MUC (d) 700 MUC
(e) 400 MUC.
4. The following is the information from national accounts of an economy:
Particulars MUC
Direct taxes 7,200
Indirect taxes 34,200
Factor income paid abroad 36,000
Factor income received from abroad 27,000
Depreciation 36,000
Surplus 3,150
Subsidies 18,000
National income 1,44,000
The GDP at market prices is
(a) 74,400 MUC (b) 90,600 MUC (c) 2,05,200 MUC
(d) 1,57,050 MUC (e) 1,36,800 MUC.

5. The following information is given from the national accounts of a country for the year 2002-03.
Particulars MUC
Factor income earned within domestic territory(NDP-FC) 13,000
Gross domestic fixed capital formation 1,200
Net domestic fixed capital formation 800
GNP at market prices 17,000
Indirect taxes 600
Subsidies 200
The net factor income from abroad for the year 2002-03 is
(a) 3,000MUC (b) 2,600 MUC (c) 3,200 MUC (d) 3,400 MUC (e)2,200 MUC.

6.

Year Nominal GNP GNP Deflator Real GNP

2001-02 2500 100 ?
2002-03 3200 129.50 ?
2003-04 4250 135 ?
1. Answer : (c)
Reason :Personal income = National income – (corporate taxes + retained earnings) +
Transfer payments =25000 – (720 + 1500) + 695 = 23475.
Personal disposable income = personal income – personal taxes = 23475 – 2025
= 21450
Personal savings in the economy = Personal disposable income – Consumption
expenditure
= 21,450 – 20,000 = 1,450 MUC.
2. Answer : (e)
Reason :Personal Income = National Income – Undistributed corporate profit – corporate
tax + Transfer payments
National Income = GNP at market price – Depreciation – Indirect taxes +
Subsidies
= 3,400 – 380 – 346 + 40
= 2,714
Personal Income = 2,714 – 56 – 150 + 484
= Rs.2,992 cr
Personal tax payments = Personal Income – Personal disposable income
= 2992 – 2586 = Rs.406cr.
3. Answer : (d).
Reason : NFIA = NNPMP – NDPMP
NNPMP = NNPFC + Indirect Taxes – Subsidies = 16800 + 3800 – 400 = 20200
Thus, NFIA = 20200 – 20000 = 200MUC.
Factor income received from abroad = Factor income paid abroad + net factor income earned
abroad
= 500 + 200 = 700MUC.
4. Answer : (c)
Reason : National income = NNP at factor cost
NNP at factor cost = GDP at market price – Indirect taxes + subsidies + NFIA –
Depreciation
Or, GDP at market price = NNP at factor cost + Indirect taxes – subsidies - NFIA +
Depreciation
= 144000 + 34200 – 18000 – (– 9000) + 36000 = 205200 MUC.
Where NFIA = (Factor income received from abroad – Factor income paid abroad) =
(27000 – 36000) = –9000 MUC
5. Answer : (c)
Reason : NNP at market price = GNP at market prices – Depreciation
= 17,000 – (1,200 – 800) = 16600
NNP at factor cost = NNP at market prices – Indirect taxes + subsidies
= 16600– 600+ 200
= 16200
Net factor income from abroad =NNP at factor cost–NDP at factor cost (Factor income earned
with in domestic territory)
= 16200– 13000 = 3,200MUC.