Question Bank

Define GDP at market price.

Distinguish between domestic income and national income.

Calculate National Income from the following data (₹ crore): Compensation of employees 1000, Rent 200, Interest 150, Profit 250, Mixed income 300, NFIA 50.

Explain the steps to calculate national income by the value added method. Use a small example.

Define money.

Explain credit creation by commercial banks with LRR = 10% and an initial deposit of ₹1,000. Find total deposits.

How does the RBI control credit in the economy? Explain any three tools.

What is APC?

In an economy, MPC = 0.75 and investment rises by ₹200 crore. Find the change in income.

Explain the determination of equilibrium level of income with the help of the AD–AS approach and the saving–investment approach. Draw diagrams.

Give the formula for fiscal deficit.

From the following (₹ crore) calculate Revenue Deficit, Fiscal Deficit and Primary Deficit: Revenue receipts 20,000; Revenue expenditure 24,000; Capital expenditure 30,000; Non-debt capital receipts 5,000; Interest payments 4,000.