NCERT Solutions for Class 12 Economics II Chapter 2 National Income Accounting – Here are all the NCERT solutions for Class 12 Economics I Chapter 2. This solution contains questions, answers, images, explanations of the complete chapter 2 titled National Income Accounting taught in Class 12. If you are a student of Class 12 who is using NCERT Textbook to study Economics I, then you must come across chapter 2 National Income Accounting. After you have studied lesson, you must be looking for answers of its questions. Here you can get complete NCERT Solutions for Class 12 Economics I Chapter 2 National Income Accounting.
NCERT Solutions Class 12 Economics Chapter 2 National Income Accounting
Here on AglaSem Schools, you can access to NCERT Book Solutions in free pdf for Economics for Class 12 so that you can refer them as and when required. The NCERT Solutions to the questions after every unit of NCERT textbooks aimed at helping students solving difficult questions.
For a better understanding of this chapter, you should also see summary of Chapter 2 National Income Accounting , Economics, Class 12.
Class | 12 |
Subject | Economics |
Book | Introductory Macroeconomics |
Chapter Number | 2 |
Chapter Name |
National Income Accounting |
NCERT Solutions Class 12 Economics chapter 2 National Income Accounting
Class 12, Economics chapter 2, National Income Accounting solutions are given below in PDF format. You can view them online or download PDF file for future use.
National Income Accounting
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Download NCERT Solutions Class 12 Economics chapter 2 National Income Accounting In PDF Format
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Question & Answer
Q.1: What are the four factors of production and what are the remunerations to each of these called?
Ans : The four factors of productions are 1. Land It is a free gift of nature and it is called as natural, original or primary factor of production. 2. Labour It is a person engaged in some physical work it is the human factor of production. 3. Capital It means wealth, money or income which is invested in business it helps in the production function. 4. Entrepreneur It is the work of an entrepreneur to bring the required factors together and work harmoniously. The remuneration to them are as follows 1. Land Rent is a reward for the use of land. 2. labour Wages are the reward for a labour. 3. Capital Interest is the reward for capital. 4. Entrepreneur Profit is the reward for an entrepreneur.
Q.2: Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
Ans : In a simplified economy, income is either spent on the purchase of final goods and services or saved. Expenditure of income on the final goods either causes final consumption expenditure or investment expenditure. To the extent income is saved, final goods remain unsold. But it treated as inventory investment. So it is said that aggregate final expenditure of an economy is equal to aggregate factor payments. I.e., Y=C+S
Q.3: Distinguish between stock and flow. Between net investment and capital which is a stock and which is a flow? Compare net investment and capital with flow of water into a tank.
Ans : Difference between Stock and Flow
Difference between Net Investment and Capital
Flow of water in a tank is a flow concept because it is measured in per unit of time period. Where as, stock of water in a tank is stock because it is measured at a point of time. Capital is like a stock of water in the tank at a point of time.
Q.4: What is the difference between planned and unplanned inventory accumulation? Write down the relation between change in inventories and value added of a firm.
Ans : Planned Inventory In case of an expected fall in sales, the firm will have unsold stock of goods which had not anticipated Hence, there will be planned accumulation of inventories. Whereas. Unplanned inventory accumulation. In case of an unexpected fall in sales, the firm have unsold goods which it had not anticipated Hence, there will be unplanned accumulation of inventories. Relation between Change in Inventories and Value Added Change in inventories of a firm during a year = value added + intermediate goods used by the firm — sale of the firm during a year and value added In net contribution made by a firm in the process of production It IS value added = value of production — value of intermediate goods used.
Q.5: Write down the three identities of calculating the GDP of a country by the three methods. Also briefly explain why each of these should give us the same value of GDP.
Ans : Three identities of calculating GOP are as follows l. Product Method or Value Added Method It is that method which measures national income In terms of value addition by each producing enterprise In the economy It is calculated as Gross Value Added in the primary sector at Market Price + Gross Value Added in the secondary sector at Market Price + Gross Value Added in the Tertiary Sector at Market Price \(=\mathrm{GDP}_{\mathrm{MP}}\) \(=\mathrm{GDP}_{\mathrm{MP}}\) — Depreciation = Net Domestic Product at Market Price \(\mathrm{NDP}_{\mathrm{MP}}\) — Net Indirect Tax = Net Domestic Product at Factor Cost \(\mathrm{NDP}_{\mathrm{MP}}\) + NFIA = National Income II. Income Method Under this method national Income is measured in terms of factor payments to the owners of factors of production. It is calculated as Compensation of Employees + Operating Surplus + Mixed Income of the self employed = Net Dornestlc Income Net Domestic Income + NAA = National Income Ill Expenditure Method Under this method national income is measured in terms of expenditure on the purchase of final goods and services produced in the economy. it is calculated as. Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross Domestic Fixed Capital Formation + Change in Stock + Net Exports \(=\mathrm{GDP}_{\mathrm{MP}}\) \(=\mathrm{GDP}_{\mathrm{MP}}\) — Depreciation = Net Domestic \(\mathrm{Product}_{\mathrm{MP}}\) \(=\mathrm{GDP}_{\mathrm{MP}}\) - Net Indirect Tax -z \(=\mathrm{NDP}_{\mathrm{FC}}\) \(\mathrm{NDP}_{\mathrm{FC}}\) + NFIA = National Income
NCERT / CBSE Book for Class 12 Economics
You can download the NCERT Book for Class 12 Economics in PDF format for free. Otherwise you can also buy it easily online.
- Click here for NCERT Book for Class 12 Economics
- Click here to buy NCERT Book for Class 12 Economics
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