c.u.

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Macro-Economics
Practical Question

Suggested by
Sandip Kumar

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Q.1. Calculate national income following (1) Expenditure method and (ii)
Income method based on the following information:
(i) Private final consumption expenditure 10,00,000
(ii) Public final consumption expenditure 50,000
(iii) Gross domestic fixed capital formation 40,000
(iv) Compensation of employees 11,50,000
(v) Change in stock 20,000
(vi) Mixed income of self-employed 20,000
(vii) Net indirect taxes 5,000
(viii) Consumption of fixed capital 10,000
(ix) Rent 17,500
(x) Interest 12,500
(xi) Net factor income from abroad 15,000
(xii) Dividends 30,000
(xiii) Net exports 20,000
(xiv) Undistributed profits 10,600
(xv) Corporation tax 9,400

Q.2. Calculate GNPmp following (i) Income method and (ii) Expenditure method
on the basis of following information:
(i) Private final consumption expenditure 8,000
(ii) Net exports 200
(iii) Rent 400
(iv) Interest 600
(v) Government final consumption expenditure 2,000
(vi) Profit 1,200
(vii) Net domestic capital formation 1,000
(viii) Compensation of employees 8,000
(ix) Net indirect taxes 1,000
(x) Consumption of fixed capital 200
(xi) Net factor income from abroad (-) 300

Q.3. Calculate NDPDmp from the following information :

(i) Net domestic fixed capital formation 2,000
(ii) Private final consumption expenditure 6,000
(iii) Opening stock 600
(iv) Closing stock 800
(v) Net exports (-) 100
(vi) Consumption of fixed capital 300
(vii) Government final consumption expenditure 3,000
(viii) Direct purchase abroad by resident households 600
(ix) Direct purchase abroad by non-resident in domestic market 1,200
(x) Imports 300

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Q.4. Calculate GVA (at factor cost) of a firm on the basis of the following
information :
(i) Consumption of fixed capital 50
(ii) Sales 1,000
(iii) Subsidies 20
(iv) Closing stock 100
(v) Purchase of raw materials 500
(vi) Opening stock 150
(vii) Indirect taxes 100

Q.5. Calculate (i) NNP, and (ii) Gross National Disposable Income (GNDI) on the
basis of the following information:
(i) Gross domestic capital formation 2,100
(ii) Change in stock (-) 300
(iii) Private final consumption expenditure 30,000
(iv) Government final consumption expenditure 1,000
(v) Net exports (-) 200
(vi) Net factor income from abroad (-) 100
(vii) Net domestic fixed capital formation 2,000
(viii) Net current transfer from rest of the world 300
(ix) Interest on public debt 150
(x) Personal tax 250
(xi) Net indirect tax 1,700
(xii) Undistributed profits 2,500

Q.6. If C = 250 + 0.9y and I = 4000 calculate the equilibrium level of national
output.

Q.7. If the consumption function is C = 100 + 0.8y and I = 50 find the

equilibrium level of national income. If the autonomous investment rises by an
amount of ₹10 then what would be its impact on equilibrium level of national
income?
Calculate the magnitude of investment multiplier.

Q.8. In an economy, with every increase in income, 75 percent of the increased

income is spent on consumption. Suppose a fresh investment of ₹200 takes
place in the economy. Calculate the following:
(a) Change in income (∆Y) and (b) Change in saving (∆S).

Q.9. If the consumption function in an economy is C = 50 + 0.75y and the

investment function I = 80 - 200r find the IS equation and the equilibrium level
of national income (y) when the rate of interest (r) is 8 per amt.

Q.10. In an economy C = 200 + 0, 6y , I = 150 - 500r M1 = 0.2gamma , M2 = 60 -

100r and Ms = 180 Determine the IS and LM function, and rate of interest (r).

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Q.11. If the consumption function in an economy is C = 50 + 0.75y and the

investment function I = 80 - 200r find the IS equation and the equilibrium level
of national income (y) when the rate of interest (r) is 8 percent.

Q.12. Calculate National Income from the following data:

Cross National Product at market price 500
Gross Domestic Private Investment 100
Net Domestic Private Investment 75
Indirect Tax 50
Subsidy 30

Q.13. In an economy the rate of MPC and MPS is 4:1. The consumption at zero
level of income is ₹ 50 crores.
(i) Frame a consumption equation
(ii) Find the value of investment multiplier.

Q.14. From the following data, calculate GDP at markets price.

(i) National Income 58,000
(ii) Factor income paid to abroad 12,000
(iii) Factor income received from abroad 9,000
(iv) Consumption of fixed capital 1,200
(v) Subsidies 6,000
(vi) Indirect taxes 11,000

Q.15. From the following data, calculate GNP at factor cost:

(i) GDP at market price 5,000
(ii) Net factor income from abroad 100
(iii) Indirect taxes 150
(iv) Subsidy 50
(v) Gross Domestic capital formation 300
(vi) Net Domestic capital formation 200

Q.16. Calculate (i)Depreciation and (ii)National income from the following data:
GNP at market price 15,000
Subsidy 100
Net domestic private investment 200
Gross domestic private investment 300
Indirect business taxes 150

Q.17. If marginal propensity to consume is 0.75, how much additional

investment is required to increase Income by ₹600? Also find the value of the
multiplier in this case. What will be the value of the multiplier if the entire
additional income is converted into additional consumption?

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Q.18. Suppose the saving function is S = 0.2y-500 and the investment function
is I = 0.1y+500. Find the consumption function and the equilibrium level of
income. Now, assume that the saving function changes to S = 0.3y - 500 what
will be the new equilibrium level of income, is there any implication of this
result? Explain.

Q.19. If the consumption function is given by C = 40 + 0.8Y and the investment

function is expressed as I = 60 - 200r find out the equation for commodity
market equilibrium. What will be the shape of the resulting curve obtained
from this equation? [The symbols have their usual meanings].

Q.20. In an economy, with every rise in national income, 20% of the increased
income is saved. Now suppose that a fresh investment of ₹150 crores takes
place in the economy. Calculate the change in income and change in
consumption expenditure.

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