Question
Explain ‘consumption function’ with the help of a schedule and diagram.
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| ₹ (in crores) | ||
| (i) | Compensation of employees | 2,000 |
| (ii) | Rent | 400 |
| (iii) | Profit | 900 |
| (iv) | Dividend | 100 |
| (v) | Interest | 500 |
| (vi) | Mixed income of self-employed | 7,000 |
| (vii) | Net factor income to abroad | 50 |
| (viii) | Net exports | 60 |
| (ix) | Net indirect taxes | 300 |
| (x) | Depreciation | 150 |
| (xi) | Net current transfers to abroad | 30 |
|
|
|
(Rs. Crores)
|
|
(i)
|
Rent
|
100
|
|
(ii)
|
Net current transfers to rest of the world
|
30
|
|
(iii)
|
Social security contributions by employers
|
47
|
|
(iv)
|
Mixed income
|
600
|
|
(v)
|
Gross domestic capital formation
|
140
|
|
(vi)
|
Royalty
|
20
|
|
(vii)
|
Interest
|
110
|
|
(viii)
|
Compensation of employees
|
500
|
|
(ix)
|
Net domestic capital formation
|
120
|
|
(x)
|
Net factor income from abroad
|
(-) 10
|
|
(xi)
|
Net indirect tax
|
150
|
|
(xii)
|
Profit
|
200
|
|
S.No.
|
|
(₹ in crores)
|
|
1.
|
Import of goods.
|
800
|
|
2.
|
Export of goods.
|
550
|
|
3.
|
Import of services (Banking, Shipping, Insurance, Tourism, etc.)
|
50
|
|
4.
|
Export of services (Banking, Shipping, Insurance, Tourism, etc.)
|
150
|
|
5.
|
Unilateral transfers from rest of the world (Gifts, Aids, etc.)
|
100
|
|
6.
|
Unilateral transfers to rest of the world (Gifts, Aids, etc.)
|
80
|
|
7.
|
Capital receipts (Loan from foreigners, Sale of assets to foreigners, Receipt of capital from foreigners).
|
200
|
|
8.
|
Capital Payments (Loans to foreigners, Buying of assets from foreigners, Payment of capital to foreigners).
|
70
|
|
|
|
(₹ crores)
|
|
(i)
|
Net current transfers to abroad
|
$10$
|
|
(ii)
|
Private final consumption expenditure
|
$500$
|
|
(iii)
|
Current tansfers from government
|
$30$
|
|
(iv)
|
Net factor income to abroad
|
$20$
|
|
(v)
|
Net exports
|
$(-) 20$
|
|
(vi)
|
Net indirect tax
|
$120$
|
|
(vii)
|
National debt interest
|
$70$
|
|
(viii)
|
Net domestic capital formation
|
$80$
|
|
(ix)
|
Income accruing to government
|
$60$
|
|
(x)
|
Government final consumption expenditure
|
$100$
|
| S.no. | Contents | $(Rs$. in Crores$)$ |
| $ (i)$ | Rent | $ 200$ |
| $ (ii)$ | Net Current Transfers to Abroad | $ 10$ |
| $ (iii)$ | National Debt Interest | $ 60$ |
| $ (iv)$ | Corporate Tax | $ 100$ |
| $ (v)$ | Compensation of Employees | $ 900$ |
| $ (vi)$ | Current Transfers by Government | $ 150$ |
| $ (vii)$ | Interest | $ 400$ |
| $ (viii)$ | Undistributed Profits | $ 50 $ |
| $ (ix)$ | Dividend | $ 250 $ |
| $ (x)$ | Net Factor Income to Abroad | $ (-)10$ |
| $ (xi)$ | Income Accruing to Government | $ 120$ |
| S.no. | Contents | $(Rs$. in Crores$)$ |
| $ (i)$ | Personal Tax | $ 80$ |
| $ (ii)$ | Private Final Consumption Expenditure | $ 600$ |
| $ (iii)$ | Undistributed Profits | $ 30$ |
| $ (iv)$ | Private Income | $ 650$ |
| $ (v)$ | Government Final Consumption Expenditure | $ 100$ |
| $ (vi)$ | Corporate Tax | $ 50$ |
| $ (vii)$ | Net Domestic Fixed Capital Formation | $ 70$ |
| $ (viii)$ | Net Indirect Tax | $ 60$ |
| $ (ix)$ | Net Indirect Tax | $ 14$ |
| $ (x)$ | Change in Stocks | $ (-10)$ |
| $ (xi)$ | Net Imports | $ 20$ |
| $ (xii)$ | Net Factor Income to Abroad | $ 10$ |