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(i) Yes it will be included as its part of Factor Income earned in domestic territory of the country. 

(ii) Payment of fees to a Chartered Accountant is an intermediate expenditure for the firm. Hence it is to be deducted from the value of output of the firm to obtain value added. Hence it is not included in domestic factor income of India

(iii) No, as rent received be Indian resident from Russian embassy will be part of Fcator Income received from abroad as Russian Embassy is not part of domestic territory of the country. 

(iv) No, as compensation is given by insurance company to employee and not by employer.  

Multiplier = 1/(1 - MPC)

When MPC = 4/5;

K = 1/(1 - 0.6) = 1/02 = 5

When MPC = 1/2

K = 1/(1 - 0.5) = 1/0.5 = 2

Observing the same we may conclude that there exist positive or direct relation between MPC and Investment Multiplier. 

Investment Multiplier coefficient measures the change in final income with respect to given change in the initial investment in the economy. It carries direct relation with rate of growth in an economy, i.e. higher the MPC more chance of growth exists in an economy. But, it is a two sided sword hence if investment falls in an economy the income may also fall. 

One of the objectives of a government budget is to ensure redistribution of income 

i.e., to reduce inequalities in income by provisions in budget. 

To reduce inequalities in income and wealth, a government may adopt the liberal expenditure policy in favour of people whose income levels are low. The government can provide subsidies and other amenities to poor people. Expenditure incurred by the government on unemployment allowance, old age pension, social security, adult education, health facilities, etc., benefit more the poor. Such a policy increases the disposable income and reduces the inequalities. The government may increase its investment in public works like costruction of roads, railway lines, canals, bridges etc. This will help in increasing the income of the poor and reducing the inequalities. The government can use its taxation policy to reduce inequalities in income and wealth. The government may impose income tax at higher rates on the rich people and at lower rates on poor people.»The government may impose more and more taxes on comforts and luxuries commonly used by the rich.

Non-Monetary Exchanges: GNP does not take into account those transactions that are not expressed in monetary terms. This is a major limitation of GDP as an index of the welfare of a country as there, are many transactions which although are non-monetary in terms but add to the growth and. development of the nation. For example, work was done by a social worker or a homemaker. Here, a homemaker adds to the welfare of the family by keeping them healthy, which, in turn, adds to the welfare of the country. However, as such transactions are non-monetary in nature, these are not included while calculating the domestic income  In less developed countries there are various non-monetary exchange particularly in the rural areas and household sector. Consequently, such transactions remain outside the domain of GNP leading to underestimation of the value of GNP. Thus, GNP cannot be regarded as an index of economic welfare, as it ignores the household and the volunteer sectors.

(i) Dividend received a foreigner from investment in shares of an Indian company- Not included separately. It is a part of profit & profit is calculated in National Income before the distribution of dividend. 

(ii) Profits earned by a branch of an Indian Bank in Canada- Included as a part of factor income from abroad. 

(iii)scholarship given to Indian students studying in India by a foreign company- Transfer payment- not includedno services are rendered by students against the payment.  

(i) Remittances from non-resident Indians to their families in India- Not included- transfer payment 

(ii) Rent paid by the embassy of Japan in India to a resident Indian- Not included as the embassy of japan is the domestic territory of japan, it is factor income from abroad, not included in Domestic factor income. 

(iii)Profits earned by branches of foreign bank in India: Included- Income earned within the domestic territory of the country. 

Fiscal Deficit = Borrowings = Rs. 32 Billion. 

(i) The basic condition for equilibrium price and equilibrium quantity is as under :

Quantity demanded = Quantity supplied 

Qd = Qs

200 – 10p – 50 + 15p 

= 10p – 15p 

= 50 – 200 – 25/7 

= – 150

P = \(\frac{150}{25}\) = ₹6 

Putting the vallie of p in Qd

Qd = 200 – 10p 

= 200 – 10 x 6 

= 200 – 60 

= 140 units 

Equilibrium price = ₹ 6 

Equilibrium quantity = 140 units 

(ii) Quantity demanded = Quantity supplied

Qd = Qs 

200 - 10p = 100 + 15p – 10p – 15p 

= 100 - 200 - 25p = - 100

p = \(\frac{100}{25}\)

p = Equilibrium price = ₹ 4 

Qd = 200 – 10p 

= 200 – 10 x 4= 160 units 

Equilibrium quantity = 160 units 

As a result of change in supply, the equilibrium price has come down from ₹ 6 to ₹ 4 and equilibrium quantity has increased from 140 to 160 units.

Money supply of a country is a stock of money in circulation at any point of time.

All money mobilised by government that either creates a liability of repayment on Government or involves reduction in some of an asset by selling it off. 

Capital receipts of a government may be defined as receipts of the government that create liability of repayment on government or involve reduction in the assets.

a. Increasing the investment expenditure which will directly benefit the poor. 

b. Increasing the taxes on rich and using the same amount to benefit the poor. 

Money supply may be defined as a stock of money in circulation in a country at any given point of time.

Increasing the taxes on rich and using such revenue to benefit the poor.

or Increasing the expenditure on facilities to poor.

Consumption goods are those which are bought by consumers to satisfy their wants. 

Eg: Durable goods car, television, radio etc. Non-durable goods and services like fruit, oil, milk, vegetable etc.

In many developing nations, there is this issue that goods and services are traded through barter, i.e. without any money. Such goods and services should be included in accounting of national income, but the absence of data makes this inclusion difficult.

A Government budget is a financial statement showing item-wise expected government receipts and government payments during a particular financial year. It also presents the government's report on the financial performance during the previous fiscal year.

Currency depreciation implies that domestic currency has become less expensive in terms of foreign currency. 

If, in the initial situation, $1  = Rs.40 

And in the final situation, $ 1 =Rs.50 then, 

Rupee is depreciating against the dollar. This is because now $ 1 can be used to purchase  Rs.50 instead of Rs.40. Thus, rupee has become less expensive.

Individuals tend to store a part of their wealth or earnings as savings to be used for future needs or as an investment. However, it is very difficult to store many types of commodities. For example, perishable goods such as grains, milk, meat, etc. could not be stored to exchange goods in future. In addition to this, transportation of goods from one place to another was tedious and also difficult. Therefore, the transfer of value and wealth storage was one of the major difficulties in the Barter system.

The central bank acts as a bankers to the govt. both central as well as state govt. It carries out all the banking business of the govt. and the govt. keeps its cash balances on current account with the central bank. The central bank accepts receipts and makes payments for the govt. and carries out exchange, remittance and other banking operations.

The central bank also provides short term credit to the govt. The RBI has also the responsibility of managing the public debt. The central bank also advices the govt. in banking and financial matters.

It is the sector that produces goods by exploiting natural resources like land, water, forests, mines, etc. This sector includes agricultural and allied activities, fishing, mining and quarrying.

The difference between autonomous and accommodating transactions is tabulated below :

Money serves as a medium of exchange or payments. Money helps in buying and selling of goods and services, as it is commonly accepted as a medium of exchange. 

Money has solved the problem of lack of double co-incidence of wants, found in the barter system. Money reduces the time and energy spent in the barter system. Money has made the exchange of goods easy.

Intermediate good

Reason: Chalks, dusters, etc. purchased by a school are intermediate goods as these are used up in the process of value – addition during the year.

It is the sector that produces goods by exploiting natural resources like land, water, forests, mines, etc. This sector includes agricultural and allied activities, fishing, mining and quarrying.

Under barter system storing of value in terms of money. Money occupies less space in comparison with goods. It is comparison with goods. It is durable and money is an asset and can be stored in future. Money helps people to transfer their purchasing power from present to future. So, money is a way to store the value.

It is called manufacturing sector also. Enterprises in this sector transform one type of commodity into another type of commodity. For example: leather goods from leather, flour from wheat, sugar from sugarcane, etc.

The central bank is under the obligation to provide funds to commercial banks as and when they require financial help.

The aim is that no sound and genuine business transaction should be restricted or abandoned due to shortage of funds. Commercial banks approach central bank as a last resort in distress. The central bank advances necessary credit against eligible securities, subject to certain terms and conditions. Central bank keeps the reserves of commercial banks so gives guarantee of solvency & never refuses to accommodate any eligible bank and help them to meet emergencies.

It is known as service sector also. Enterprises in this sector produce services only. Examples are banking, transport, communications etc.

Money supply refers to the total stock of money in circulation in an economy at a given point of time. 

Components of money supply :- 

There are two components of money supply. 

1. Currency ( Coins & currency notes) held by the public (C) 

2. Demand Deposits with commercial banks  Money supply = C + DD

False. If increase in the level of GDP is associated with higher level of income inequality, social welfare may not increase.

(a) GDP at market price = GDP at factor cost plus net indirect taxes.

The central bank has sole authority for the issue of currency in the country. All the currency notes (2, 5,10, 20, 50, 100, 500, and 1000) are issued by the RBI. One rupee note and all coins are issued by the govt. of India. But the responsibility for putting them in circulation rest with the RBI. 

All the currency issued by the central bank is its monetary liability. 

Putting and withdrawing currency into and from circulation is also the job of the central bank.

Pollutants dumped by steel factories in rivers pollute water and kill the fish in the river.

(b) net indirect taxes

Commercial banks has to keep a certain proportion of its cash reserves with the RBI as Cash Reserve Ratio (CRR). The central bank provides them with centralized clearing and remittance facility. As the lender of the last resort when the commercial banks fail to meet their financial requirements from other sources, they approach to the central bank for loans and advances. The central bank assists such banks through discounting of approved securities and bills of exchange. The central bank controls them by periodic inspection and returns filled by them.

(a) equal to national income

Depreciation = GDCF - NDFCF + Ch. In stock = 300 – 200 + 50 

Depreciation = 50 GDPfc = COE + OS + MI + 

Dep = 800 + 150 + 100 + 200 + 50 

GDPfc = 1300 

GDPmp = GDPfc + NIT = 1300 + 120 

GDPmp = 1420 

NFIA = GNP mp – GDPmp 

 = 1400 – 1420 = -20 NFIA 

= Factor income from abroad – factor income to abroad 

 -20 = 60 – FI to abroad

Factor income to abroad = 80 

(d) all of the above

(c) combined factor payments which are not distinguishable

(d) Scholarships given to the students of scheduled caste

(c) both household and government sectors

NVAfc = Value of output – IC –dep –NIT 

 100 = x – 75 – 10 – (20 – 5) 

 X = 100 + 100 

Value of output = 200

Income Method NNPfc = vi + i + ii + v + vii 

 = 1000+ 150 + 250 +640 + 30 

= 2070 

Expenditure Method 

NNPfc = iii+ iv + xi + x + ix – dep – viii + vii 

 = 600 + 1200 + 340 + 50 + (- 40) – 50 – 60 + 30 

 = 207

The word statistics is used both in plural as well as in singular sense. In plural sense, statistics means numeric facts which can be used to draw conclusions and in singular sense, it means the statistical methods with the help of which statistical information is used to treat and draw conclusions from them.

There are following limitations of statistics :

(i) Qualitative Aspect Ignored:

The statistical methods don’t study the nature of phenomenon which cannot be expressed in quantitative terms.

Such phenomena cannot be a part of the study of statistics. These include health, riches, intelligence etc. It needs conversion of qualitative data into quantitative data.

(ii) It does not deal with individual items:

It is clear from the definition given by Prof. Horace Sacrist, “By statistics we mean aggregates of facts and placed in relation to each other”, that statistics deals with only aggregates of facts or items and it does not recognize any individual item. Thus, individual terms as death of 6 persons in a accident, 85% results of a class of a school in a particular year, will not amount to statistics as they are not placed in a group of similar items. It does not deal with the individual items, however, important they may be.

(iii) Statistics can be misused: The result obtained can be manipulated accordingly to one’s own interest and such manipulated results can mislead the community.

(iv) Statistical results lack mathematical accuracy: The results drawn from statistical analysis are normally in approximates. As the satistical analysis is based on observation of mass data, number of inaccuracies may be present and it is difficult to rectify them.

(v) Uniformity and homogeneity of data : It is essential that data must have the quality of uniformity and homogeneity. Heterogeneous data are not comparable. For example, it would be meaningless to compare the heights of men with heights of trees because these figures are of heterogeneous character.

Arithmetic average or mean of series of items is obtained by adding values of the items and dividing 1 by the number of items.

Merits:

1. It can be easily calculated; and can be easily understood. It is the reason that it is the most used measure of central tendency.

2. As every item is taken in calculation, it is effected by every item.

3. As the mathematical formula is rigid one, therefore the result remains the same.

4. Fluctuations are minimum for this measure of central tendency when repeated samples are taken from one and the same population.

5. It can further be subjected to algebraic treatment unlike other measures i.e. mode and median.

6. A.M. has also a plus point being a calculated quantity and is not based on position of terms in a series.

7. As it is rigidly defined, it is mostly used for comparing the various issues.

Demerits of Arithmetic Mean :

1. It cannot be located graphically.

2. A single item can bring big change in the result. For example if there are three terms 4, 7, 10 ; X is 7 in this case. If we add a new term 95, the new X is 4+7+10+95/4 = 116/4 = 29. This is a big change as compared to the size of first three terms’ X.

3. Its value will be effective only if the frequency is normally distributed. Otherwise in case skewness is more, the results become ineffective.

4. In case of open end class intervals we have to assume the limits of such intervals and a little variation in X can take place. Such is not the case with median and mode, and there is no use of the open end intervals in its calculations.

(b) is the difference between total expenditure and total receipts of the government.