Question
Given saving curve, derive consumption curve and state the steps in doing so. Use diagram.
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Answer
Given saving curve SS',
- Draw a $45^o$ line from the origin.
- Take $QC$ equal to $OS$ on the Y-axis.
- Draw a perpendicular line from B to B' on OX-axis which intersect $45^o$ line at point $B$.
- Join $C$ and $B$ and extend it to get consumption curve $CC$'.
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In an economy, Aggregate Demand is less than Aggregate Supply. Is the economy in equilibrium? If not, explain the changes that will bring the economy in equilibrium.
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Given the following data, find the missing value of 'Government Final Consumption Expenditure' and 'Mixed Income of Self Employed'.
| S.No. | Particulars | Amount (In ₹ crores) |
| (i) | National Income | 71,000 |
| (ii) | Gross Domestic Capital Formation | 10,000 |
| (iii) | Government Final Consumption Expenditure | ? |
| (iv) | Mixed Income of Self Employed | ? |
| (v) | Net Factor Income from Abroad | 1,000 |
| (vi) | Net Indirect Taxes | 2,000 |
| (vii) | Profits | 1,200 |
| (viii) | Wages & Salaries | 15,000 |
| (ix) | Net Exports | 5,000 |
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| (xii) | Operating Surplus | 30,000 |
Calculate Net National Product at Market Price and Private income.
→|
|
|
(₹ 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
|
$100$
|
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| (Rs. crore) | |
|
1000 |
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100 |
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1500 |
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20 |
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300 |
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50 |
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20 |
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110 |
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15 |
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(–) 10 |
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| ₹ in crores | ||
| (i) | Compensation of employees | 250 |
| (ii) | Mixed income of self-employed | 600 |
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| (viii) | Consumption of fixed capital | 20 |
| (ix) | Net indirect taxes | 10 |
| (x) | Net current transfers to abroad | 8 |