By S Khan PGT Economics K V Aligarh Steps 1 Estiumation of Value of out put Value of out put Sales change in stock 2Estimatimg the value of intermediate consumption ID: 1027666
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1. Lesson planTopic Measurement of national incomeBy S Khan PGT ( Economics)K V Aligarh
2. Steps:- 1- Estiumation of Value of out put:- Value of out put = Sales + change in stock.2-Estimatimg the value of intermediate consumption- value of intermediate consumption=value of inputs& purchases from other firms1- Product method
3. 3- Estimating the value of GDP at MP GDP mp = Value of output – intermediate consumption4- Estimating National income NI = GDP mp – Depreciation – NIT + NFIA
4. 1- Problem of double counting 2-Non availability of reliable data 3- Difficulty in estimating value of goods produced but kept for self consumptionDifficulties of product method
5. 1-Inclusion of imputed rent of self occupied building.2-Own account production of capital goods is included3-Goods produced purely for self consumption are not imcluded.Precautions of product method
6. Find national income, GNP mp, GDP fc Sales of primary sector= Rs 3000, Value of output in secondary sector = Rs 3500,Change in stock of primary sector = Rs 400, its closing stock is Rs 450,change in stock of secondary sector = Rs 300,Value of services supplied = Rs 5000,Intermediate consumption of three sectors = Rs 4500,Depreciation = Rs 50, NIT = Rs 60, Net Factor Income to Abroad = (-) Rs 100Numerical problem
7. Find NI. GNP mp,Primary sector:-Sales in the country= Rs 2500,Closing stock 200,opening stock=Rs 150,Exports=Rs 600.Intermediate consumption = Rs 500,imports =Rs 210Secondary sector:- Sales = 3500, Exports= Rs 400,Change in stock =Rs 550, Purchase of raw material from within the country=Rs 250, Imports = Rs 300.Value of services supplied = Rs 4500, intermediate consumption of tertiary sector Rs 1500,Dep = Rs 40, NIT = Rs 30,NFIA = Rs 60
8. Steps :-1-Estimating COE:- COE = Wages and salaries + Contribution to Social security’s Schemes2-Estimating OS :- OS = Rent + Interest + Royalty + Profit OS = Rent + Interest + Royalty + (Dividend + retained earnings of corporate enterprises + corporate gain tax)Income Method
9. 3- Estimating Mixed income – it is the income of self employed persons 4- Estimating NDP fc NDP fc = COE + OS + MI 5-Estimating national income NI = NDP fc + NFIA
10. 1- Non availability of reliable data2- Difficulty created by inter-corporate dividendDifficulties of income method
11. 1-Imputed rent of self occupied building is included in national income.2-Income from wind fall gains like lottery is not included.Transfer earnings like scholarship is not included in national income.Precautions of income method
12. Find National ioncome , GNP mp, NDP mp,and GDP fcCOE = Rs 5400, contribution to Social scurrility schemes = Rs 500,Rent and interest = Rs 3000,Dividend = Rs 800, Profit Rs 900, Corporate gain tax = Rs 30,Mixed income of self employed persons= Rs 100,Net export = Rs 40,Factor income to abroad = Rs 60,Depreciation Rs 20,Subsidies = Rs 70. Numerical problem based on income method
13. Steps:-1-Estimating private final consumption expenditure ( c)2-Estimating Investment expenditure / Gross domestic capital formation ( I)3-Estimating Government final consumption expenditure ( G)4-Estimating Net Export ( X – M )Expenditure method
14. 5-Estimating GDP mp GDP mp = C + I + G + ( X – M ) 6-Estimating national Income NI = GDP mp + NFIA – NIT - Depreciation
15. 1-Non availability of reliable data2-Difficulty in classification of goods into intermediate and final goods.Difficulties of expenditure method
16. 1-Imputed rent of self occupied building is included in national income.2-Expenditure on purchasing second hand goods is not included in national income. But Income earned in the form of commission on sale of second hand goods is includedPrecautions of expenditure method
17. Find National income, GNPmp, Private final consumption expenditure= Rs 4000, Government final consumption expenditure= Rs 3000,Net fixed capital formation= Rs 1400, Net Export = Rs 1000, Closing stock = Rs 400, Opening Stock = Rs 600, Depreciation = Rs 550,Indirect tax = Rs 460,factor income to abroad = Rs 570.Numerical problem on expenditure method
18. Find National income by income and expenditure methodsCOE = Rs 2000, Rent and interest = Rs 300, Operating Surplus = Rs 4500, Mixed income = Rs = 1000, Private final consumption expenditure = Rs 2500, Government Final expenditure = Rs 1400, Net domestic fixed capital formation= Rs 550 ,Net Export = Rs 600 ,Depreciation = Rs 100, Change in stock = Rs 150.NFIA = Rs 25, NIT = Rs 45 Numerical problem
19. Thank you very much
20. Topic :- Aggregates relating to National income. Prepared By S Khan PGT Economics , K V AligarhLesson plan
21. Income accrued to private individuals and households from what ever sources in an accounting year Private income = N I - Income from property and entrepreneurship accruing to Govt administrative departments – savings of non departmental enterprises + Current transfers from Government + Net current transfers from ROW + National debt interestPrivate income
22. Income actualy received by private individuals and households from what ever sources in an accounting year Personal income = Private income - Corporate gain tax - Corporate SavingsPersonal income
23. It is the sum of personal consumption expenditure and personal savingsPDI = Personal Income –diect personal income tax – insurance premium paid by employees – miscellaneous receipts of the government OR PDI = C + SPersonal Disposable income
24. It is that part of NDP fc which accrues to private sector only IDPAPS = NDP fc - - Income from property and entrepreneurship accruing to Govt administrative departments – savings of non departmental enterprises.Income from Domestic product Accruing to Private sector
25. It is the Sum of NI , NIT and Net current transfers from ROW NNDI = NI + NIT + Net current Transfers from ROW.Net National Disposable Income
26. It is the Sum of NNDI and Depreciation GNDI = NNDI + Depreciation.Gross National Disposable income
27. Sales + Change in StockValue of Gross Product - Intermediate Consumption GDP mp , GVA mp - Depreciation NDP mp , NVA mp - NIT NDP fc, NVA fc + NFIA NNP fc, NI
28. NDP fc -income of Depart + NFIA - Savings of non NI Depart Ent IDPAPS - income of department + CurrentTrans Govt Enterprises – savings of +net “ “ ROW Non Depart. Enterprises + NFIA +Current Trans from Govt +Natioanal debt int +Net “ “ “ ROW + National Debt interest Private Income - Corporate Savings -Corporate Gain Tax Personal Income
29. Personal Income - direct personal income tax -Insurance premium by Employees - Misc Receipts of the Govt PDI - consumption Expenditure Personal savings
30. Find Pvt Income , PI, PDI, IDPAPS, GNDINI = Rs 4000, Income from property and entrepreneurship accruing to Govt administrative departments= Rs 500, savings of non departmental enterprises= Rs 400,Income tax = Rs 55, Corporate tax = Rs 30 , Corporate Savings = Rs 25,Current transfers from Government= 75, Net current transfers from ROW= Rs 80,Depreciation = Rs 100 , National debt interest= Rs 85,NIT Rs 20, NFIA = Rs 65Numerical Pr,oblem
31. Find Private income, GNDI ,PDIPersonal Savings= Rs 1200, Private consumption Exp= Rs 5000, Income from property and entrepreneurship accruing to Govt administrative departments= Rs 500, savings of non departmental enterprises= Rs 400,Income tax = Rs 55, Corporate tax = Rs 30 , Corporate Savings = Rs 25,Current transfers from Government= 75, Net current transfers from ROW= Rs 80,Depreciation = Rs 100 , National debt interest= Rs 85,NIT Rs 20, NFIA = Rs 65