TUTORIAL SHEET ON NATIONAL INCOME

1) The following table relates to the National income of country x in the year
2000. Figures are in Million of FCFA
DETAILS MILLION FCFA
Agriculture and extractive industries 600
Net property income from abroad 11300
Health, education and administration 1100
Manufacturing and construction 2100
Ownership of dwelling 4300
Depreciation 8000
Transport, communication, and distributive trade 12000
Utilities 2400
Insurance, finance, banking and other services 15000
Adjustment for financial services 500
Residual errors 800

Calculate
A) Gross domestic product at factor cost
B) Gross national income at factor cost
C) Net national product (national income)

2) In 1993, the national income of country x included the following

DETIALS Million FCFA

Value added in agriculture 200
Value added in construction 100
Value added in distributive trade 300
Value added in manufacturing 1200
Value added in other stocks 540
Residual errors 500
Depreciation/ capital consumption 2700
Property income paid abroad ( PIPA) 1200
Property income from abroad (PIFA) 1550
Calculate
A) Gross domestic product
B) Gross national product
C) National income

3) The following show the national income of an imaginary economy for a

given year. Figure are in Million of FCFA
DETAILS MILLION FCFA
Income From Employment 1050
Income from self- employment 750
Utility 500
Gross trading profit of companies 300
Health, education and defense 800
Gross trading surpluses of public cooperation 200
Rent 70
Consumption of non- trading capital 20
Stock appreciation 40
Transport and distributive trade 600
Residual error -60
Property Income From Abroad 40
Property Income Paid Abroad 30
Capital consumption 30

Calculate
i) Total domestic income
ii) Gross domestic product
iii) Gross national product
iv) National income
4) The tables gives and imaginary figure of national income of an economy.
Figures are in million of FCFA
DETAILS MILLION FCFA
Consumers expenditure 140
General government expenditure 50
Net domestic capital formation 30
st
Value of stocks of January 1 1968 70
st
Value of stocks of December 31 1968 50
Gross trading profit for companies 80
Export of good and services 45
Property income paid abroad 30
Property income from abroad 35
Taxes on expenditures 60
Subsidies 40
Capital consumption 10
Import of goods and services 40

Calculate
i) Total Investmemt
ii) Total domestic expenditure at market price
iii) Total final expenditure at market price
iv) Gross domestic product at factor cost
v) Gross national product at market price
vi) Gross national product at factor cost
vii) National income
 5) You are giving the following information
DETAILS MILLION FCFA
Consumer expenditure 30100
Gross trading profit of company 5400
Gross domestic fixed capital formation 13200
Public expenditure 12600
Export of goods and services 10700
Value of physical increase in stocks -800
Taxes on expenditure 7300
Export of goods and services 12200
Import of goods and services 650
Net property income from abroad 1300
Capital consumption 4700

Calculate
a) Gross domestic product at factor cost
b) Gross domestic product at market price
c) Gross national income at factor cost
d) National income

6)a) List 3 problems encountered when measuring national income

b) What are the reasons for measuring national income?
c) what are the reasons why national income maynot reflect the true standard of
living of a country?

7) In a close economy without government where the usual assumption of the

Keynesian macro economics apply, consumption is always ¾ of disposable
income and consumers have the potential of always consuming 100 billion
FCFA when the size of their current income is zero. All investment
expenditures are exogenous and initially plan investment is 3000 billion
FCFA.
Ai) Define disposable income (2mks)
ii) Calculate the value of disposable income

bi) Derive the consumption function of this economy(2mks)

ii) Determine the value of total consumption in this economy (2mks)
iii) List 3 factors that determine consumption (3mks)

c) if in the original situation, income tax was introduce at 1/5th as al total

income, together with a planned government sending of 200 billion FCFA
i) calculate the equilibrium rate of income