Economics · Unit 8
National Income and Macroeconomic Accounting
Exam-focused notes for National Income and Macroeconomic Accounting (Economics, ECO155): what the TU syllabus asks and how it has actually been tested, with 9 solved past questions from this unit.
What this unit covers
- National income definition
- Gross domestic product at market prices
- Gross national product
- Net national product
- GDP and GNP distinction
- Expenditure approach to GDP calculation
- Problems of measuring national income in developing countries
- Difficulties in national income measurement in Nepal
Expenditure approach to GDP calculation
Given the following data for a country (in Rs. billions): Consumption = 500, Investment = 150, Government Spending = 200, Exports = 100, Imports = 80, Net Factor Income from Abroad = 20. a) Calculate GDP using the expenditure approach. b) Calculate GNI. [5+0+0]
Item Symbol Value --------------------- Consumption C 500 Investment I 150 Government Spending G 200 Exports X 100 Imports M 80 Net Factor Income from Abroad NFIA 20 Formula: $$GDP = C + I + G + (X - M)$$ Substituting values: $$GDP = 500 + 150 + 200 + (100 ...
Full solved answer →Calculate GDP at market price and National Income (NI) from the following data.
| Items | Rs |
|---|---|
| Personal Consumption Expenditure | 2800 |
| Indirect Tax | 118 |
| Government Expenditure | 2000 |
| Closing Stock | 180 |
| Gross Private Domestic Fixed Investment | 1300 |
| Export | 1000 |
| Net Factor Income from Abroad | -100 |
| Inputs | 1100 |
| Depreciation | 190 |
| Opening Stock | 105 |
| Subsidies | 70 |
[5]
Item Rs ------ Personal Consumption Expenditure (C) 2800 Indirect Tax 118 Government Expenditure (G) 2000 Closing Stock 180 Gross Private Domestic Fixed Investment 1300 Export (X) 1000 Net Factor Income from Abroad (NFIA) −100 Inputs 1100 Depreciation 190 O...
Full solved answer →From the following data, calculate the national income.
| Particulars | Rs. in million |
|---|---|
| Gross fixed capital formation | 300 |
| Private final consumption expenditure | 900 |
| Net Export | -50 |
| Subsidies | 50 |
| Government final consumption expenditure | 150 |
| Indirect taxes | 250 |
| Change in stock | 50 |
| Consumption of fixed capital | 50 |
| Net factor income from abroad | 50 |
[5]
Particular Value ------ Gross fixed capital formation (GFCF) 300 Private final consumption expenditure (PFCE) 900 Net Export (X - M) -50 Subsidies 50 Government final consumption expenditure (GFCE) 150 Indirect taxes 250 Change in stock 50 Consumption of fi...
Full solved answer →Calculate Gross Domestic Product (GDP) and National Income
| S.N. | Items | Rs. (in Millions) |
|---|---|---|
| 1 | Personal Consumption Expenditure | 6500 |
| 2 | Indirect tax less subsidies | 150 |
| 3 | Government consumption and investment expenditure | 2500 |
| 4 | Change in business inventories | 100 |
| 5 | Gross Private domestic fixed investment | 950 |
| 6 | Exports | 900 |
| 7 | Net factor payments to the rest of the world | -100 |
| 8 | Imports | 1200 |
| 9 | Depreciation | 200 |
| 10 | Foreign investment | 250 |
[5]
Item Rs. (Millions) --------------------- Personal Consumption Expenditure (C) 6500 Indirect tax less subsidies 150 Government consumption & investment (G) 2500 Change in business inventories 100 Gross Private domestic fixed investment 950 Exports (X) 900 N...
Full solved answer →Find the GDPMP, GNPM, and NNP from the following information.
| Items | (Rs in crores) |
|---|---|
| Gross fixed domestic capital formation | 200 |
| Net exports | (-14) |
| Net indirect taxes | 94 |
| Net changes in stock | 26 |
| Private final consumption expenditure | 500 |
| Government's final consumption expenditure | 150 |
| Net factor income from abroad | 50 |
| Capital consumption allowance | 80 |
[5]
- Gross fixed domestic capital formation = 200 - Net exports (X − M) = −14 - Net indirect taxes (NIT) = 94 - Net changes in stock = 26 - Private final consumption expenditure (C) = 500 - Government's final consumption expenditure (G) = 150 - Net factor inco...
Full solved answer →Find the Gross Domestic Product at Market Prices
| S.N. | Particular | Rs. (In crores) |
|---|---|---|
| 1. | Consumption of fixed capital (Depreciation) | 60 |
| 2. | Government's final consumption expenditure | 200 |
| 3. | Net factor income from abroad | -10 |
| 4. | Private final consumption expenditure | 800 |
| 5. | Export | 50 |
| 6. | Import | 30 |
| 7. | Gross domestic capital formation | 230 |
[5]
S.N. Particular Rs. (crores) ------------------------------- 1 Consumption of fixed capital (Depreciation) 60 2 Government's final consumption expenditure (G) 200 3 Net factor income from abroad (NFIA) −10 4 Private final consumption expenditure (C) 800 5 E...
Full solved answer →Difficulties in national income measurement in Nepal
Define national income. Explain the difficulties of measuring national income in developing countries like Nepal.[10]
National Income is the total monetary value of all final goods and services produced by a country during a specific period (usually one year), regardless of whether the production occurs within or outside the country's borders. It represents the aggregate e...
Full solved answer →GDP and GNP distinction
Distinguish between GDP and GNP. What are the problems of calculating national income in developing countries like Nepal? [5]
GDP (Gross Domestic Product) GNP (Gross National Product) ------ Total value of all final goods and services produced within a country's borders during a specific period Total value of all final goods and services produced by nationals of a country (regardl...
Full solved answer →Distinguish between GDP and GNP. Describe various problems of measuring national income in developing countries like Nepal.[10]
- Definition: Total monetary value of all final goods and services produced within the geographical boundaries of a country during a specific period (usually one year), regardless of the nationality of producers. - Scope: Includes production by both domesti...
Full solved answer →Make Unit 8 stick
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