Numerical Problems & Formulas
1 Quick Explanation 1–3 min
Every national income numerical is just the conversion ladder + one of the three methods.
Identify the aggregates given, write the formula, plug values, convert to NNPfc.
2 Detailed Notes
Formula
The master ladder
GDPmp
→ GDPfc = GDPmp − NIT
→ NDPfc = GDPfc − Dep
→ NNPfc = NDPfc + NFIA
National Income = NNPfcMost board numericals ask you to walk this ladder. Add/subtract only what is given.
Comparison
Quick conversion table
| Given | Want | Add (+) | Subtract (−) |
|---|---|---|---|
| GDPmp | GNPmp | NFIA | — |
| GNPmp | NNPmp | — | Depreciation |
| NNPmp | NNPfc | Subsidies | Indirect taxes |
| NDPfc | NNPfc | NFIA | — |
| GDPmp | NDPfc | — | Dep + NIT |
Key idea
Common included/excluded items
- Included: wages & salaries, rent, interest on production loans, profits (corporate & non), mixed income, social security contributions by employer.
- Excluded: old age pension, scholarship, gifts, lottery, sale of second-hand goods, capital gains, indirect taxes (for FC).
- Intermediate consumption is subtracted in value added method.
Example
Solved example (Income method)
Compensation of employees = 1000; Rent = 200; Interest = 150; Profit = 250; NFIA = 50. NDPfc = 1000+200+150+250 = 1600. NNPfc = 1600 + 50 = 1650. National Income = ₹1650 crore.
Example
Solved example (Expenditure method)
C = 5000, I = 2000, G = 1500, X = 800, M = 300, Dep = 300, NIT = 400, NFIA = 100. GDPmp = 5000+2000+1500+(800−300) = 9000. NDPfc = 9000 − 300 − 400 = 8300. NNPfc = 8300 + 100 = 8400.
In One Minute
Identify aggregates → walk the ladder (NIT, Dep, NFIA) → apply one method → answer in NNPfc. Practise 10 numericals and you're exam-ready.
Important for Exam
- ⭐ 3-mark: 'compute national income using income method'.
- ⭐ 4-mark: mixed items, classify included/excluded.
- ⭐ 6-mark: full value added or expenditure method with all conversions.
- ⭐ Always state units (₹ crore) and mention 'NNPfc' in the answer line.
Watch & Learn
Watch on YouTubeALL Formulas One shot Revision - Macroeconomics - Class 12
by Rajat Arora
Why watch? Dense board-level practice, great before exams.
Open on YouTube Watch on YouTubeALL Formulas One shot Revision - Macroeconomics - Class 12
by Rajat Arora
Why watch? Good if you want just the conversions.
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