Q21 of 30 Page 1

Find net value added at factor cost (Rs lakh)

(i)Fixed capital good with a life span of 5 years 15


(ii)Raw material 6


(iii)Sale 25


(iv)Net change in stock (-) 2


(v)Taxes on production 1


Value of output = Sales + Change in stock


=20 + (-) 2 = Rs. 18 lakh


Gross value added at market price = Value of output – Intermediate consumption


=22 - 5 = Rs17 lakh


NV AFC = GV AMP - Depreciation -Net indirect tax


= 17(Cost of producer goods ∕ No. of useful life in years) – (Indirect tax – Subsidy)


= 17- (10 lakh ∕ 10) – (1-0)


= 17-1-1 = Rs15 lakh


More from this chapter

All 30 →
19

Fiscal deficit equals : (choose the correct alternative)

(a)Interest payments


(b)Borrowings


(c)Interest payments less borrowing


(d)Borrowing less interest payments


 20

Foreign exchange transactions dependent on other foreign exchange transaction are called: ( choose the correct alternative)

(a)Current account transactions


(b)Capital account transactions


(c)Autonomous transactions


(d)Accommodating transaction


 22

Distinguish between marginal propensity to consume and average propensity to consume. Give a numerical example.

OR


Explain the role of taxation in reducing excess demand.


 23

In an economy investment is increased by Rs. 300 crore. If marginal propensity to consume is 2/3, calculate increase in national income.