Answer to Question #222552 in Macroeconomics for Muskan saifi

Question

(b) Calculate National Income
S.No.
Component
Amount
1
Private final Consumption Expenditure
900
2
Corporation Tax
100
3
Govt. Final Consumption Expenditure
200
4
Personal Income Tax
120
5
Undistributed Profit
50
6
Change in stocks
(-)20
7
Net domestic fixed capital formation
120
8
Net Imports
10
9
Net Indirect Tax
150
10
Net Factor income earned from abroad
(-)10
11
Private income
1000

Answer 1

Using the expenditure approach, national income can be represented as follows: National Income = C (household consumption) + G (government expenditure) + I (investment expense) + NX (net exports).

NATIONAL INCOME=900+100+200+120+50-20+120-10+150-10+1000

= 2,600