All questions of National Income Accounting for Commerce Exam

Because it is used for immediate consumption .
it does not required any further processing

True, because it is measured over a period of time.

True: It can happen when NFIA is negative i.e., factor income paid to abroad is more than factor income received from abroad. 

C

Question hi answer hai iska.....'Final goods' -Means No Further production is required....it is ready for Consumption like-,Milk is a final good if it is purchased to drink,Bicycle that is sold to consumer is a final good or consumer goods.

Yes, it is possible for GDP to be higher than GNP and it is also possible for GNP to be higher than GDP. GNP greater than GDP is best for a country because it means that the population of that country will have a greater total income (i.e. total output) than if GDP was greater than GNP.

Explanation:



Factor income is the income that is earned through factors of production such as land, labor, capital, and enterprise. Here, we need to identify the factor income among the given options.



a) Royalty: Royalty is the amount paid to the owner of an asset for its use. It is not a factor income as it is not earned through any factor of production.



b) Rent: Rent is the payment made to the owner of land or any other asset for its use. It is a factor income as it is earned through land, which is a factor of production.



c) Subsidies: Subsidies are the financial assistance provided by the government to promote an industry or a product. It is not a factor payment as it is not earned through any factor of production.



d) Tax: Tax is a financial charge imposed by the government on individuals or businesses for the income earned or goods and services consumed. It is not a factor income as it is not earned through any factor of production.



Therefore, the correct answer is option B, Rent is a factor income.

Real GDP and Welfare are related with each other as rise in the real GDP leads to rise in the welfare.

Real flows refer to the flow of the actual goods or services, while money flows refer to the payments for the services (wages, for example) or consumption payments.

Former flow happens in factor market while latter flow happens in goods market. Money flow refers to the flow of factor payments from firms to households and payment for goods and services by households to firms.

Intermediate goods or producer goods or semi-finished products are goods , such as partly finished goods, used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods, or make and then sell, or buy then use them.

Policies and their impact on the economyc)Microeconomics focuses on individual and small group behavior and decision-making related to the allocation of resourcesd)Microeconomics focuses on overall economic indicators such as GDP and inflation rates.

Answer: c) Microeconomics focuses on individual and small group behavior and decision-making related to the allocation of resources.

Explanation: Microeconomics is a branch of economics that examines the behavior of individuals and firms in making decisions regarding the allocation of scarce resources. It focuses on the study of small economic units such as individuals, households, and firms. In contrast, macroeconomics deals with the overall performance of the economy and its key indicators such as GDP, inflation, and unemployment.

Explanation:

Growth Rate of GDP According to NSO:
- The National Statistical Office (NSO) has estimated that the country's GDP will contract by a record 7.7% during the current financial year.
This indicates that the GDP is expected to shrink by 7.7% as per the first advance estimates released by the NSO. The negative growth rate suggests a contraction in the economy's overall output and performance during the specified period.

It helps to identify how, when, and by whom implementation will be assessed. Monitoring of implementation keeps everyone involved aware of any possible barriers as well as any intended and unintended impacts of the work. After implementation, resources and other supports from stakeholders may decrease.

The two sector economy has the following assumptions:

1. There are only two sectors in the economy; household sector and business sector.
2. No government interventions over the economic activities.
3. Business sectors do not carry out any import or export activities, creating a closed economy.

Consumer goods are ultimately consumed, rather than used in the production of another good. For example, a microwave oven or a bicycle that is sold to a consumer is a final good or consumer good, but the components that are sold to be used in those goods are intermediate goods.

As households are the provider of Fops(factors of production) and firms i.e producers in return provide services and final products..They both are complimentary to each others...Households spend their money on goods and services rendered by producers/firms and producers spend on FOPs like land,labour,capital,entrepreneurship skills in change of wages,rent,interest and profit
This is two sector economy..where as three and four sector economy has govt.(G) and foreign exhange(X-M)
hope this will help you

Milk and Bread are examples of Non-durable good. Non-durable gods are those goods which are used-up in a single act of consumption. Bread and milk are used-up in a single act of consumption. The same milk or bread cannot be used again.

Real GDP is the value of final goods and services produced in a given year expressed in terms of the prices in a base year. To calculate Real GDP, we use base year prices and multiply them by current year quantities for all the goods and services produced in an economy.

Positive externalities refer to positive impact of an economic activity on the others without involving any price.

Nominal GDP is the total value of all goods and services produced in a given time period, usually quarterly or annually. Real GDP is nominal GDP adjusted for inflation. Real GDP is used to measure the actual growth of production without any distorting effects from inflation.

' wages
c)Corporate profits
d)Interest on loans

b)Employers' wages are an example of factor payments. Factor payments refer to payments made to the factors of production, which include labor, capital, land, and entrepreneurship. Employers' wages are payments made to the factor of production, labor, for their contribution to the production process.

D

Understanding Material Well-Being
Material well-being refers to the economic condition and overall quality of life of individuals within a society. It encompasses the availability of resources, access to basic needs, and the general prosperity of the population.

Why Option 'B' (Welfare) is Correct
- Definition of Welfare: Welfare specifically pertains to the well-being and prosperity of individuals and communities. It includes factors such as income, health, education, and access to resources that enhance the quality of life.
- Context of the Case: In the context of the budgetary allocation for the environment ministry, the emphasis on controlling pollution and promoting cleaner air directly impacts the welfare of citizens. Cleaner environments lead to better health outcomes, improved living conditions, and overall enhanced quality of life.
- Contrast with Other Options:
- Externality: This term refers to the unintended side effects of economic activities on third parties. While related to welfare, it does not directly define material well-being.
- Economy: This term describes the system of production, distribution, and consumption of goods and services but does not specifically denote the well-being of individuals.
- None of the Above: This option is incorrect because welfare accurately captures the essence of material well-being.

Conclusion
In summary, welfare is the most appropriate term that encapsulates the concept of material well-being, especially in the context of governmental policies aimed at improving the living conditions of the populace.

B)Households and firms
c)International sector or rest of the world

The country's real gross domestic product is likely to expand due to a faster economic recovery following the relaxation of the lockdown.

Firms: Households own all the factors of production: land, labor, capital. These factors of production are sold to the firms to produce goods and services through factor markets.

The Relationship Between Domestic Factor Income and National Income

To understand the relationship between domestic factor income and national income, we need to first define these terms.

Domestic Factor Income: Domestic factor income refers to the income earned by domestic factors of production, such as labor and capital, within a country's borders. It includes wages, salaries, rent, and profits earned by individuals and businesses within the domestic economy.

National Income: National income, on the other hand, is the total income earned by all factors of production, both domestic and foreign, within a country's borders. It includes domestic factor income as well as net factor income from abroad.

Net Factor Income from Abroad: Net factor income from abroad is the difference between the income earned by domestic factors of production in foreign countries and the income earned by foreign factors of production within the domestic economy. It includes wages, salaries, rent, and profits earned by domestic factors abroad, minus the income earned by foreign factors in the domestic economy.

The Role of Net Factor Income from Abroad in Calculating National Income:

Now, let's consider the question at hand - what must be added to domestic factor income to obtain national income? The correct answer is option 'A', which is net factor income earned from abroad.

Net factor income from abroad is an important component of national income as it represents the income earned by domestic factors of production in foreign countries. By including this income in the calculation of national income, we get a more comprehensive measure of the total income generated within a country's borders.

Including net factor income from abroad is necessary because factors of production, such as labor and capital, can also earn income outside of the domestic economy. For example, a domestic company may have subsidiaries or branches in foreign countries where it earns profits. Similarly, domestic workers may find employment opportunities abroad and earn wages there.

By adding net factor income from abroad to domestic factor income, we capture the income earned by domestic factors both within the domestic economy and abroad. This provides a more accurate measure of the total income generated by a country's factors of production.

Conclusion:

In conclusion, when calculating national income, we need to add net factor income from abroad to domestic factor income. This is because net factor income from abroad represents the income earned by domestic factors of production in foreign countries, which is an important component of a country's total income. Including this income provides a more comprehensive measure of national income and helps capture the income generated by a country's factors of production both domestically and abroad.

Two sectors of the economy