Find Gross National Product at Market Price and Private Income: (Rs crores)

(i)Private final consumption expenditure 800

(ii)Net Current transaction to abroad 20

(iii)Net factor income to abroad(-) 10

(iv)-300

(v)Net indirect tax150

(vi)Net domestic capital formation200

(vii)Current transfer to government40

(viii)Depreciation100

(ix)Net imports30

(x)Income accruing to government90

(xi)National debt interest50

For the blind candidate:

Explain the consumption function. Derive saving function from the consumption function

Indian investors lend abroad. Answer the following questions

(a) In which sub-account and on which side of the Balance of Payments Account such lending is recorded? Give reasons.

b) Explain the impact of lending on the market exchange rate.

When does ‘change in quantity demand’ take place?

What happens to the difference between the average total cost and the average variable cost as production is increased?