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l al a i l ala i l al a i l al a i
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l al a i l al a i l al a i l al a i
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production.
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l alia i . l a a i . l a ia i . l a ia i .
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l alia.Oi . Or l alia.Oi . O l alia.Oi . O l alia.Oi . O
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l alia i . l alia i . l alia i . l alia i .
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National . O O grg
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O . O rgrg
O
l alia i . l alia i . l alia i . l alia i .
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 15. The value of NNP .
ww. P
at Pproduction point is called.
ww. P P
22. Write the formula for
ww. . P P
calculating GNP. .
ww.P P
ww
ww _______. ww ww ww ww wwww ww
ww
Ans. GNP at market prices = GDP at market prices +
(a) NNP
(b) i . O
NNP. rgrat
O g factor
at market
cost
cost i . O . rgrg
O
Net factorrg
i .O . O
income
rg from Abroad. i.O . rgrg
O
l al a i l al a i GNPl al a= iC + I + G + ((X–M) + (Rl a
–l a i
P))
a daadsaas(c)
a GNP at factor cost asaasa
a da d a daadsaCasa - Consumption Expenditure a daadsaasa adaada
s
.
ww P. P (d) Per capitawincome w . P. P ww. P.P ww . P. P .
ww P. P

m
ww
ww  wwww ww
[Ans. (a) NNP at factor cost]
ww I wwww
- Investment Expenditure ww
ww
g g G - Government
g Expenditure
16. The O
i average
. r
O
.Personalr g income of the country
i O
. i. Ois
r g
_______.
r i O
. - 
. r
O r g
i O Orgrg
.exports
.
l a
(a)
asa l a i Income asal al a X–Ml al a i Difference between value
asa imports of goods. asaasa l a l a i and
s s s daadsa

co
a a a
dad (b) Per capita income a a
dad a a a
dad a a dad a
P
. .P P
. .P P
. .P R–P - Net factorwincome P
. P P
. .P
ww
ww
ww (c) Inflation ww ww ww
Rate wwwwww
ww www. from abroad ww ww ww
(d) Disposal Income 23. What is the
 i.O r
O grg [Ans. (b) Per capita
.O Or grincome]
g . O r
O grdifference
g between NNP and
. O Or grNDP?
g
i . iai. Ans. Net iai.
Domestic Produce (NDP)la isliathe
i . value
a l al a
a value of national aincome a l al
a adjusted for a l al
aoutput of the economy aduring a a the year. of

s.
a
dad s
17.a sThe dad s
a s a
dad sa s
net dad s a s daadsa
P
.. Pa inflation is called P a
P
._______.
. ..P a
P ..P a
P ..P a
P
wwww ww ww wwww Net Domestic ww ww
product = GDP – Depreciation ww ww
ww (a) Inflation ww Rate ww ww ww
(b) Disposalrgrg Income Net National rgrgProduct (NNP) refersi.O to rthegrgvalue

ok
i . O . O i . O . rgrg
O i . O . O . O
(c)
l
asala a i
GNP l
asal a a i of the
l
asala a i
net output of the economy l a a i
asal the year.
during
d adsa (d) Real national income d ad s
a d adsa d a s a
d allowance daadsa
. P Pa a . P a
P a . P a
P a NNP = GNP – . P a
P a
depreciation . P a
P
wwww.  ww. (d) Real national income]
w[Ans.
w wwww. ww ww. ww ww.
ww ww ww ww ww
18. Which is a flow concept ? 24. Trace the relationship between GNP and NNP.
o
(a) .Number
O r g g
Or of shirts (b) Total .O r g g
wealth
O r Ans. Grossi.O rgrg Product (GNP)i.isO.O
National
O grgtotal
rthe
l alia i . l alia i . l al a i . l a l a i
a d adsaas(c)
a Monthly income as(d)
a d d aasMonthly
aMoney supply
a d
asa of the flow of final agoods
adsameasure a d d saasaand services at
adaada
s
ab

. P. P a  . P[Ans.
. P a (c) income] . P. P a market value resulting . P.from
P a current production .P.P
wwww ww ww wwww in a country during ww wawyear, including net income ww ww
ww 19. PQLI is thewindicator w of _______. ww ww ww
(a) Economic growth from abroad.
O r
O g
.Economicr g O
. i. r
O gr g .O rgrgProduct (NNP) refersi.O
O O grg
rthe
i . i NetlaNational
i . .
s l
asa a
(b)l a i welfare
s asal al a s asthel a i
a net output of the economy s asaduring thevalue
l a l a to
i
a a
dad (c) Economic progress a
dad a a
dad aof a
dad a year. daadsa
ur

P
. .P a P
. .P a P a
. .P NNP is obtainedwby P
. P a P
. .P a
ww
ww
ww (d) Economic ww www
wdevelopment wwwwww
w www. deducting the value
w w w
ww
wofw
 [Ans. (b) Economic welfare] depreciation.
. O O g
r rg proportion of national . O O g
r rgincome NNP. O rg=rgGNP – depreciation allowance
O . O Orgrg
20. The a i ilargest
.
lala from _______. saslala a i i . a i i . a i i .
aslala lala
.s

d adsaascomes d ad a 25.
d adsaWhat do you mean byd a saasterm
the
d ‘Personal daadsa
..P a
P a (a) Private sector ..P a
P a ..P a
P a ..P a
P a ..P a
P
wwww ww ww wwww Income’? ww ww ww ww
ww (b) Local sector ww ww Ans. (i)
w w
Personal income is the total income
w w
w

(c) Public rrg gsector rrg g rgrg by the individuals iof

received arg rg
country
l a
(d) ia. O
i .
None O of the above[Ans. (a)
l a i . O
i .
Private
a O sector] l a ia. O
i . O l a a. O
i . O
l l l l of direct
a daadsaasa a daadsaasa a daadsaasa from taxes
all sources beforespayment
in a year. a daadaasa a daadsa
wP w. - B
.
ww.P P .
wart P P .
ww. P P . P P
ww. is never equal to the .
ww. P P
w

ww
ww ww w wwww (ii) Personal ww w w
income wwww
Answer the following questions in national income, because the former
O r gr g
O sentences lalia. i.O O r gr g rgrg the transfer payments
.includes
O .O rgwhereas
rg
one lor alia. itwo
. 2 Marks l alia i . O l a lia i . O
adsaasDefine
a adsaasa adsaasa they are not included adinsaanational
sa
w

income. s
. P. a
P
da21. National Income.
. P. a
P
da . P. a
P
da .P .Pa da . P. adaada
P
wwww Ans. “The labour and ww wcapital
w of a country acting www
onw 26. Define GDP deflator. ww ww ww ww
ww ww ww ww ww
its natural resources produce annually a certain Ans. GDP deflator is an index of price changes of
net .O
i . rgrg of commodities,i.O
aggregate
O . rgrg and
material
O goodsi.and O . rgservices
O rg included in GDP. i .O . O rgrg
aal al a i
immaterial including servicesaa l al
of a i
all kinds. This aal al a i aala l a i
P a daadsasis the true net annual P a daadsas or revenue of the Padaadsas GDP deflator = P
income a daadsasGDP × 100
Nominal
P adaadsa
. .P
ww country or national ww P
. .dividend”. ww. .P ww . .P ww. .P
ww
ww ww ww wwww ww ww Real GDP wwww
O rgrg
O O Orgrg 25 O rgrg
O O rgrg
O
a i
lala . i . a i . i . a i . i . a i . i .
d a
d [email protected] d a
d saaslala PH: 9600175757 dadsaasla/la8124201000 / d8124301000
adsaaslala daadsa
P
.. a
P a P
.. a
P a P
.. a
P a P
.. a
P a P
.. a
P
ww
ww ww
ww ww
ww ww
ww ww
ww
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Sura’s
i . O . rgr-gXII Std - Economics
O i . O . rgrg
O i . O . rgrg
O Chapter
i . O . rgrg2
O
l al a i l al a i l al a i l al a i
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 27. Why is self .
ww. P P
consumption difficult in measuring.
ww. P P
national income? .
ww. P P .
ww.P P
ww
ww ww ww ww
wnational
w ww
wnot
w ww
ww
Ans. Self consumption is difficult in measuring income because it is clear that the produce which
is not sold rgrgin the market can be included rgrgin the national income orrg
not.
rg rgrg
l a ia. O
i . O l a ia. O
i . O l a ia.Oi . O l a ia.Oi . O
l l Part -dCadsaasa l l
a daadsaasa a daadsaasa a a a daadsaasa adaada
s
. P. P
ww Answer the following ww. P. P . P.P
w paragraph www
wone ww. P. P .
ww P. P

m
ww
ww ww ww questions wwwinw w 3 Marks ww
ww
28. Write arg short note on per capita income.
rgrg rgrg rgrg
Ans. (i) i . O
i . O
The
rgaverage income of ala i.O
i
person. O i
of a country in a particular.O
i .Oyear is called per capitala i .O
i
income.. O
l
sasa al a la
asa by diving nationalaincome sasal al a sasa l a
dsaobtained daadsa

co
.P.P adaada (ii) Per capita income P adaa
. .P
is adada by population. adaada
P
. .P P
. .P P
. .P a
w ww
w wwww wwww ww ww wwww
ww w w
Per capita income = National w
income
w w w ww
rgrg Population
rgrg rgrg rgrg
a
lalai . O
i . O a i .Oi . O a i . O
i . O a i . O
i . O
saasDifferentiate saaslalaand disposable income. saaslala saaslala

s.
P a d
a a
29.
d between
P a daa
personal
d P a d
a ad P a d
a ad P a daadsa
ww P
. . Ans. ww .. P ww.. P ww .. P ..
ww P
ww
ww S. No. ww ww Personal Income ww ww ww
Disposable
ww Income ww
ww
1.
rgrPersonal income is the total income Disposable Income
rgrItgis isthealso known as Disposable

ok
i . O . O g
received by the individualsi . O . rofgragcountry
O personal income.
i . O . O individuals income
i . O . O grg the
rafter
la l a i l a a i
al payment of payment l al a i l al a i
a d
a adsaasa from all sources
a daadsaasbefore a d
a adsaasaof income tax. a d
a adsaasa a daadsa
.
ww.P P direct taxes
ww.. P Pin a year. .
ww. P P ww.. P P .
ww.P P
ww
ww 2. ww ww
Personal income is never equalwto
ww
w the This is the amount ww wavailable
w for households wfor
ww
w
rgrnational income, because the former consumptions. g
o
i . O . O g
includes the transfer O
payments
i . . rgrgwhereas
O i .O . r rg
O i .O . rgrg
O
l al a i l al a i l al a i l al a i
a d adsaasa a dsaasa in national dadsaasa
they are notdaincluded
a a dadsaasa adaada
s
ab

. P. P a income. . P. P a . P. P a . P. P a . P. P
wwww wwww wwww ww ww ww ww
ww 3. ww
Personal Income = National w w
income Disposable Income w =w Personal Income – Direct tax. ww
– social security contribution and As the entire disposable income is not spent
i .O .Org rg
undistributed corporate
i . O . r
O gr g profits) consumption. i . O . rgrg
O i . O . rgrg of
O
i i i i
d adsaaslaala + Transfer payments. d ad saaslaala a saaslaalaincome = Consumption
Disposable
d d d a
d
aala
sa+aslSaving daadsa
ur

P
. .P a a P
. .P a a P
. .P a a P
. .P a a P
. .P a
wwww wwww wwww ww ww wwww
ww ww ww ww ww
30. Explain briefly NNP at factor cost. GNP = C + I + G + (X – M)
Ans. (i) i.O r
NNP
O grg refers to the market value . O r
O gofrgoutput. . O r
Ogrg . O rgrg
O
a i .
lala NNP at factor cost issasthe a i i .
a of income a i C i . = Private consumption a i i .
laltotal saaslala saaslala
.s

d adsaas(ii) d ad a d ad expenditure.
d a
d daadsa
P
.. Pa a payment madeP
.. Patoafactors of production. ..P a
P a P a
P a
. . investment expenditure.ww . P a
P
ww
ww
ww
(iii) The money wwwwww
value of NNP at marketwprice, ww
w
ww I =w
w w www
Private
w ww .
w
G = Government expenditure.
w

weg deduct the amount of indirect g taxes g

i . O . O
and
g
r r add subsidies to arrive i . O . O g
ratr the net i .XO .–O g
rMr = Net exports. i . O . rgrg
O
l a l a i l a a i l a a i l a a i
d adsaasa national incomeadat saasalcost.
adfactor 32.
d
asal is the solution to theaproblem
adsaWhat d d saasal of double daadsa
. P Pa a . P P a . P a
P a . P a
P a . P a
P
ww. w w.= NNP at Market prices w– w. counting in thew ww. of national income?
estimation ww.
w

ww NNP at factor ww cost ww w ww

ww 
ww Indirect taxes + subsidies.
w w Ans. (i)
w w
Double counting is to be avoided under w w
r g g r g g value rgradded
g method. rgrg
31. Give
l a lia.Oi . Or note on Expenditure
short l alia O
i . Or
.method. l
(ii) alia O
.Any
i . O commodity which l a
is
lia.Oi . O
either raw
saas(i)
a The total expenditure saasaincurred by the dadsaasa saasa
w

a a a s
. P. aa
P
dAns.
d
society in . P
the. P
d d
aparticular
a year is added . P. aa
P material or
.P .Paad
intermediated good for the final
. P. adaada
P
wwww wwww wwww production ww w w not be included. www
should ww
ww ww
together. ww ww w
(iii) For example, value of cotton enters value
(ii)
To g calculate the expenditure
g g gof the grg as cost, and value.O rgyarn
i .O
i . r
O r
society, it includes personal i .O
i
r
O r
consumption
. i.ofO
i . ryarn
O i ofO
i. rg in
l al a
saasa expenditure, netdaddomestic l ala
saasa investment, dadsaasa l ala cloth and that of cloth l
in
saasaal a
garments. At
P a d
a a
d P a a P a a every stage value
P a d a
d
added
a only should be P adaadsa
. .P
ww government ww .P
.expenditure on consumption ww. .P ww. .P . .P
ww
ww
ww as wellwwww
as capital goods and net exports. wwww calculated.wwww wwww
O rgrg
O O Orgrg 26 O rgrg
O O rgrg
O
a i
lala . i . a i . i . a i . i . a i . i .
d a
d [email protected] d a
d saaslala PH: 9600175757 dadsaasla/la8124201000 / d8124301000
adsaaslala daadsa
P
.. a
P a P
.. a
P a P
.. a
P a P
.. a
P a P
.. a
P
ww
ww ww
ww ww
ww ww
ww ww
ww
 s a laalia. i.This is only for a laalia. i.
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s s a laalia. i. www.TrbTnpsc.com s a laalia. i.
P a daada s www.Padasalai.Net
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wwwwww

National . O O grg
rIncome . O rgrg
O Sura’s
. O rgrg - XII Std - Economics
O . O rgrg
O
l alia i . l alia i . l alia i . l alia i .
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 33. Write briefly ww.. P
about P national income and
ww.. P P (vi) To build . P
economic
ww. P models both in short .
ww. P P
ww
ww welfare. ww ww wwww wwww
and long-run. wwww
Ans. (i) National
rgrg income is considered rgrg as an (vii) To rgmake international comparison, rgrg
i . O
i . O
indicator of the economic i . O . O
well-being
i of a i .O .
inter
i O rg regional i
comparison .Oi . O and
s a laal a s a laal a s a laal a s a laal a s
a s a s a s a s
. P. adada
P
country.
. P. adada
P . P.P
inter-temporal
adada of the economy. .
comparison
P. adada
P
for the growth
. P. adaada
P
ww (ii) The economic ww progress of country wisw ww ww

m
ww
ww ww ww wwww wwww wwww
measured in terms of their GDP per capita (viii) To know a country’s per capita income
and
rgrg their annual growth rate. rgrg whichrgrgreflects the economic iwelfare rgrgof the
i . O
i . O
laala A country with a higher i. Oi . O
alacapita income i . O
i . O
country. . Oi . O
saas(iii) aper
saaslgreater aslaala
sa(ix) saaslaaoflaincome for daadsa

co
a daad is supposed toa da a
enjoy
d economic a daad To know the d a
distribution
a a d a
P
. .P P P standard of living.ww
. a.higher P
. P P
. .Pof productions. P
. .P
ww
ww
ww welfarew ww
wwwith
w ww ww . the various
ww ww ww
factors
ww wwww
34. List out the uses of national income. To arrive at many macro economic
. O r
O gr g .O r
O gr g . O rgrg namely, Tax - GDP ratio,
variables
O . O rgCurrent
O rg
Ans. Uses
l a ia iof
. National Income : l a ia i . l a ia i . l a i
a i .
a l
a The National Income a l
sasa of a country dadsasa a l Account Deficit - GDP ratio,
a
sasa l Fiscal Deficit

s.
d adsas(i) d ad d ad daadsa
P Pa a P Pa a P a
P a GDP ratio, Debt P -a
PGDP
a ratio etc. P a
P
.. . .economic performance worw . .. ..
ww
ww
ww describes
w ww
w
wthe
w w www . 36. Discuss the various w www ww
methods of estimating w www
the
ww
production performance of a country.
national income
rgrg of a country. i.O.O

ok
(ii) Economists,
rgrg planners, Government, rgrg rgrg
i . O
i . O i . O
i . O There i . O
i
are. O three methods of measuring i
s l
asala a business man and
s l
asala
international
a agencies Ans.
s l a a
asal They are, s asal national
l a a
P a daad a (IMF, World
P a d
Bank
a ad a etc.) use national
P a daad aIncome.
P a daad a
P a daadsa
.
ww. P incomew .
wwand
data P
. analysis them for various ww.. P (i) Production w . P
w.Value added method.www
(or) .
ww. P
ww
ww w w w w www w www w
purposes. (ii) Income method (or) Factor earning
o
r g
(iii) ONational g income data
Or in the standard lofaliliving
. i.changes help
.Oin r g g
measuring
Orover time rgrg
.method.
O O .O rgrg
O
l alia a i . l alia i . l al i
a i .
a d adsaasa and also enableausdaato d saasa
compare standard of a d adsa(iii)
asa Expenditure method.asaasa
adad: adaada
s
ab

. P. P a . P. P . P. P a (i) Production Method . P. P . P. P

wwww ww countries.
livingwofwdifferent ww
ww ww ww wwww
ww ww ww (1) Product ww method measures wthe w
(iv) Level of development of a country is output of the country.
O
. i. r
O g
alsor gmeasured by using national
O
. i. r
O gr gincome O
.(2) r
O gr g .O rgrg
O
l alia
a a figures. aal a lia aal alia i . It is also called inventory
aa l al i
a i .method.
daadsas daadsas daadsas (3) In this P daadsasthe gross value Padaadsa
method,
ur

P
. .P a P a
. .P- D P
. .P a a
. .Pfrom different sectorsww . P
ww
ww
ww
wwwPwwart
w ww
ww
ww of w
w w
output
www
w www .
like agriculture, industry and
Answer the following questions in
g
r rg g
r5rM g r rgcommerce etc. is obtained
g rgrfor
g the
one lpage
a i . O
i . 
O a i . O
i . O arks a i . O
i . O entire economy during a i .aOi . O
year.
saasala saaslala saaslala(4) The value obtained saaslaislaactually the
.s

P a daad
35. Explain the importance
P a da ad
of national income. P a daad P a daad P a daadsa
..
ww P ww .. P ww .. P GNP w
at w P
.market
. prices. ww.. P
ww
ww Ans. Importance ww
wof
w National Income : ww ww ww ww ww ww
(5) Care must be taken to avoid double
(i) The
w

g national income is considered g as

i . O . rr
O g
accounts of the economy, i . O . O g
rwhich
r are i . O . rgrgcounting.
O i . O . rgrg
O
l al a i l a l a i l al a i l a a i
al product is
a daadsaasa known as socialaaccounts. da adsaasa a daadsaasa (6) derived The value of the
by a d adsaasfinal
summation
a of all the a daadsa
.
ww.P P (ii) To know w . P P
w.relative importancewofwthe ww.. P P . P. P .
ww.P P
wthe ww
w

ww
ww variouswwwsector of the economy andwthe w ww ww
values added in the productive ww ww
process.
contribution
g towards national income. g g
i O
. i.Tor r g
O formulate the national i O r r g
. i.O such as i (7)
O r r g
. i.O To avoid double counting, i .O . rgrgeither
O
(iii)
l al a l a lpolicies
a l al a l al a i
adsaasa monetary policy, adsaasapolicy and other adaadsaasa the value of theas asaoutput should
final
w

s
. P. a
P
da . P. a
P
da fiscal
. P. P be taken . P.Pa
into da d
the
aestimate of GNP. .P.P adaada
wwww policies.www ww
ww ww ww wwww
ww (iv) The proper
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l al a i l al a i l al a i l al a i
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l a a O side. (iii)
l a ia.Oi .
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l l l l
a daadsaasa (2) In this amethod daadsaasanational income adaadsa(iv) asa
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s
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ww ww. .P ww . .P (i) Transfer payments ww. .P : ww. .P
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a i i . domestic facors income
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d ad factor incomes
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a d adsaasa society in
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aal al a i la l a i l al a i l al a i
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l alia i . l alia i . l alia i . work) cannot sbe l a a i
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ww. 37. What are the .
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wdifficulties .
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w

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l alia l alia l alia i . l al a i .
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.
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a alala i a alala i considered
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National . O O grg
rIncome . O rgrg
O Sura’s
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O . O rgrg
O
l alia i . l alia i . l alia i . l alia i .
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P (v) Production . P
wwfor P
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ww
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ww
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rgrg Farmers keep a large rportion
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l alia.Oi . O food and other goods
l alia.Oi . O
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a saasa a saasconsumption.
a a saasa a saasa s
. P. aa
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d d the farm
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for
aa
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d self
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d
aa d adequate.
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aa d . P. adaada
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ww
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w (6) National
wwww wwww
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l al a i l a la i 38. Discussl al a i the importance of social l al a accounting
i
aa aa aa aa
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a laal a i (2) Capital gains are
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various sectors such as l a
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a l a i
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s.
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P daadsas
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..
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i . O . rgrg
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O i . O . rgrg
O i . O . rgrgis useful for economists
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as
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l al a i l a l a i l al a i l al a i
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aslaala
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ab

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ww ww ww wofw ww
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i .O .Orgrg Additional i .O . rgQ

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O
aal al a i aala la i l
asa al a i l al a i
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NNP
da daadsa
ur

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ww NominalwGDP wwww wwww
ww ww ww (a) w × 100 w w
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r rg . O O g
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.s

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ww
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ww
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O g at Market Prices.O –.O
grg
rIndirect
l a ia i . l a ia i . l a a i . l a ia i
al Gross Net Providentasaasal
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l taxes + Subsidies.]sasal
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l alia i . l alia i . l alia i . l alia i .
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a .Oi . O la ia.Oi . O
aa l aa l aa l aa l
P a daadsas P a daadsas P a daadsas P a daadsas P a daadsa
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Sura’s
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O i . O . rgrg
O i . O . rgrg
O Chapter
i . O . rgrg2
O
l al a i l al a i l al a i l al a i
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 5. Percapita Income .
ww.=P P .
ww.P P
12. GNP is the total P
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. P of the flow of _______ . P P
ww
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(b) Nationalrgrg Income + Population rgrg (a) Semirgoods grg rgrg
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i . O
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i . O (b)l a i .O
Semi
a i . Ofinished good l a ia.Oi . O
l ÷ l l l
a daadsaas(d)
a
National Income a
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Population
a a da
asa
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s
.
ww P. P . P. P
ww Income ÷ Population] .
ww P.P . P. P
ww [Ans. (c) Final goods] .
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i .
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daadsas(a) Open economyPadaadsas daadsa(a)s Two Pada(b) adsaaFour
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al Production activity asaasal l a a i l
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l
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wwww ww watw price is known
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l a a i l a a i (d) la a i
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ww ww ww ww ww
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(vi) Assertion and Reason. 1. Concepts of National Income
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o
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a
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asa
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National . O O grg
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l alia i . l alia i . l alia i . l alia i .
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 2. Write the formula. P P
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Ans. Per capita r gr income =
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l a ia. O
i . O Population
l a ia. O
i . O (ii)
l a ia.Oi .
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l l l l
a daadsaasWhat
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a
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asa
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s
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ww P. P ww. P. P ww . P.P ww. P. P ww. P. P

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ww Income? ww ww (iv) Rest of w wworld
the w ww
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Ans. (i) Production or Value added method. (v) Capital Sector
(ii)i.O r grg method or Factor
Income
O O
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O gr g .O rgrg
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l al a i
a a method. . aa l ali
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What
asa alia i . the basic concepts aa l a l
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measuring
daadsas daadsas daadsanational daadsas daadsa

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P
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wwww (iii) Expenditure
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. Method
ww ww. .P
wwww . .P
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ww Product (GNP) ww
4. What do you mean by Real Income? (ii) Gross
Ans. (i) i.O r
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in
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O
a i . a i i . (iii)a i i
Net. National Product (NNP) a i i .
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saof particular year. aslala aslala

s.
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P a ..P a
P a ..P a
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i . O . O rgrg
O i . O . O i . O
s aslaalai
National Income aslaalai Income at
National
s s
of lthe
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lagoods s atime i
laalaproduced by
P a daa a
d at constant price .PP =
a da a a
dcurrent price ÷ P1/P0 .PP a daad aan economy over a period
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.
ww. P ww. ww. year). ww.. P .
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5. What do you mean by National Income?
13. What is Gross National Product?
o
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O
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g means the total money
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O .O rgrisg the
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i . Ans. (i) aia .Gross
i . a ia i .
l
of l all final goods and services l l in a l l l l
a d adsaascountry
a
during a d
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s
ab

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rg and (ii) It includes
rgrg profits earned ifrom rgrcapital
g
i .
services
l a a O
i . O produced within the l i . O
i
country
a a . O during a l a ia. O
i . O
invested from abroad. l a a. O
i . O
aa l aa l l l
daadsasyear. daadsas d adsaasa d adsaasa d adsa
ur

P
. .P a P
. .P a P a a
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. .P a a
wwww ww ww
GDP bywexpenditure methods at market ww ww wwww wwww
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. O rgrg
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total
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O grg
a i i .
lala the formula for Personal a i i . a i i .
produced by the factors aofi i .
production
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.s

d
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.. Pa
ww
ww
ww Personal Income ww ww
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w w
ww
wwwwww
(ii) The factors of production may be owned
w

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g profit) + Transfer Payments. g grg
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lalia. i.O
g Or r
lalia. i.O
g by
Oranyone-citizens
lalia. i.O
or foreigners.
lalia. i.OOrgrg
a d
a adsaasWhat
8. a do you mean by Disposable
a d
a adsaasa Income? a d
a adsaaGDP
sa = GNP – Net income
a d
a
saasa from abroad
adearned a daadsa
. PP
ww. Ans. Disposable Income . PP
wwis. an individuals incomew . PP
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ww.P
wwww Ans. Net Domesticww
w

ww
ww wwww ww w ww
w
the payment of income tax. This is the amount Product (NDP) is also arrived
available rgfor
g households for consumption. r g g from GDP rgby
g making adjustment with grg to
rregard
l alia.O
i . Or l alia.O
i .Or l a ia.O
i
depreciation
l . Or l alia.O
i . O
9.saWrite
a a short note on Capital sa aGains. sa a sa a
w

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.P . adaAns.
P Capital gains .
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P
when
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wwww ww
wproperty,
w wwww ww ww wwww
ww a house, other ww stocks or shares,wetc. w is 16. What is the real ww national income? ww
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i .O . rgrgprice’
O
l al a i l ala i is l a a i
computed
l based on the realla a
worth
l i of the
d a
d saasfrom
a national income. asaasa
d d d a
d saasa d a
d saasa daadsa
P a a P a a P a a purchasing power of Pincome
a a it is called as ‘real P a
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ww
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Sura’s
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O i . O . rgrg
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l al a i l al a i l al a i l al a i
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.
ww.P P 17. What is Simple ww.. P P
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.
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rgrg refers to allrgrgthose
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a. O
i . O namely savings or i i
investment(I),
l a a public l a ia Oi . O
.expenditure undertaken l
by a ia.O
the
O
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s as a l s a
s a l s as a l s as a l s
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adaout adaada
.
ww P. P on net exports(X-M). ww . P. P ww ww. P. P ww .

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ww
ww wwww wwww goods likewMachinery,
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O .O rgrg
O
Ans. (i)
l a ia i
a l a ia i . l a ia i .
l
a a prices to compute a l
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sa of output. l
asa These expenditure a l
saasa be excluded
daadsas daadsa(ii) daadsa

co
P a P a dathe
d P a P a dashould
d P a
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ww
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w
than real value.
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O r grg O r grg O grg
rCapita O rgrperson
g
a laalia. i . O P art - C a l
a alia. i . O Ans. (i)
a l
a alia.Per
i . O income (or) output
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per
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O

s.
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wwP P ww P
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one paragraph  3 Marks (ii) If real PCI increases.

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. O rr
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. O rgrg in
O
l
1.saWhata ia i . l a ia i . l a a i . l a ia i .
al are the difficulties adsaasa
lin measuring l
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l
adsaasaof people.
P a daadasNational Income? P a da P a da P da P a daadsa
. P
ww. Ans. (i) Transferwpayments .
w . P .
ww. P (iv) PCI is arrived . P
wwat. by dividing the GDP w .
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ww
ww wwww wwww
the sizew
ww
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o
i .O . rgrg
allowance.
O i .O . rgrg
O (v) ItOrisgrgalso arrived by making
i O
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. i .O . rgrgsome
O
l al a i l al a i l al a i with GDP sa l al a i
a d adsaas(iii)
a Unpaid Services asaasa
a d d a d adsaasa a d adasa adaada
s
ab

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wwww (iv) Incomew from
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ww ww ww wwww
ww ww ww (vi) w w GDP w w
(v) Production for self consumption and PCI =
.O O gr g
changing
r price.
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O .O rgrg
O
l a
a(vi)lia i . l alia i . l alia i . in a country
l alia i .
a Capital Gains asaasa aa aa
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P a P a P a P a
or P a
w. .P
www w. .P
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www w. .P
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ww w w
2. Write down the some of the statistical
w w w w National Income
w w
PCI =
problems?
. O Or grg . O r
O grg . O rgrg
O Total Population . O rgrg
O
a i i.
lala Accurate and reliablesdata a i i .
a not adequate a i i . a i i .
aslalare saaslala saaslala
.s

d adsaas(i)
Ans.
d ad a d ad d ad daadsa
P
.. Pa a as farm outputP
.. Pa
inathe subsistence sector is
..P a
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P a What is Output method?
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P a What is its major ..P a
P
wwww ww ww
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(ii) Ing animal husbandry thereg are no Ans. (i) In the
w

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O
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O i. O . rgrg output or product imethod,
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O
s laalai
as(iii) s laalai
acustoms, s
i
aslaalameasures s aslaalai by adding
of GDP are calculated
P a d
a ad a Different languages,
P a d
a ad a s etc., also
P a d
a ad a the total value of
P the
a d
a ad a
output (of goods and
P a daadsa
.
ww. P . P
ww. in computing estimates.
create problems ww.. P . P
ww. by all activities during .
ww. P
w

ww ww ww services) produced
ww ww
ww w w
(iv) People in India are indifferent to the
w w w w w w
any time period, such as a year.
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official
g inquiries. They are
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O
l alia i .non-cooperative also. l alia i . l al a i . l alia i .
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a adsaasstaff
a adsaasa problem of doubleadcounting. adsaasa
w

s
. P. a
P
d
a Most of the . P. a
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d
statistical
a are untrained . P. a
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d
a .P .P a . P . adaada
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ww ww ww 6. What are the National ww Income identities? ww w
ww
ww ww
and inefficient.
ww ww ww ww ww ww w
(vi) Therefore, national income estimates Ans. The followings are some of the National Income
i .O . rgrour
in
O g country are not very
i .O . O grg or
raccurate Identitities:
i.O . r rg
O g
i .O. r rg
O g
l al a i
a a adequate. aal ala i l ala i
asa = GNP – Depreciation l
aaal a i
a ad dasas a a dasas
d a daadsaNNP a daadsas a daadsa
w .P.P wwP
. .P ww P
. .P NNI = NNPw P.P taxes
.Indirect P
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ww
ww
ww w ww
ww ww ww ww ww– w ww
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O O Orgrg 38 O rgrg
O O rgrg
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adsaaslala daadsa
P
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P a P
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Theories i . O . rofgrgEmployment andi.Income

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l al a i l al a i l al a i l al a i
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l al a i l al a i l al a i l al a i
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Theories i . O . rofgrgEmployment andi.Income

O O . rgrg
O i Sura’s
. O . rgrg - XII Std - Economics
O i . O . rgrg
O
l al a i l al a i l al a i l al a i
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 32. What do you .
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mean P by aggregate demand? .
ww. P P y .
ww.P P .
ww.P P
ww
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Ans. (i) In
rgrgthe Keynesian model, rgoutput
rg is rgrg rgrg
l a ia. O
i . O
determined mainly by i .
aggregate
l a a O
i . O demand. l a ia.Oi . O l a ia.Oi . O
l l l l

Expected Proceeds
a daadsaas(ii)
a
The aggregate d adsaasais the amount of adaadsaasa
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a a a daadsaasa adaada
s
.
ww P. P . P. P
ww entrepreneurs expectww w . P.P .
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m
ww
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w ww tow ww
ww z
ww
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number
O i.O . rgrg
O i .O . rgrg
O i .O . rgrg
O
l al
a(iii) a i
a Aggregate demandahas l
atheala i
a following four aal al a i aal al a i
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co
P a
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. .P P a
. .P P a
. .P P a
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i . O
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i . O Employment salala aNfi .Oi .O
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s.
a a a da as s
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PPa d d (4) Net Export
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wwww wwww wwww w ww ww ww
ww wwAD = C + I + G + (X–M) ww (i) Z curve ww iswlinear where money wages ww
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i . O. Orgryg i . O. Orgrg i . O
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. rgrrate
O increases with i . O
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s aslaalai s aslaalai s aslaalai s aslaalai
P a daad a
P a daad a AD
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. P . P . P . P
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l ali
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ab

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wwww wwww wwww (iv) Thus aggregate ww ww supply is an important ww ww
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aal alia 0 aa l alia l
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daadsas Employment
daadsas daadsaWrite
34. any five differences aasa Classism adaadsa
daadsbetween
ur

P
. .P a P
. .P a P a
. .P and Keynesianism. P
. .P a .P.P
w ww
w 33. Explain about w w
w w www w w w
w w w www
ww ww aggregate supply with the wwhelp Ans. ww ww
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Ans. (i) i . O . rgrg supply functioniis.Oan
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Aggregate . rgincreasing
O rg S. i . O . rgrg
O i . O . rgrg
O
a i a i a i a i
saaslala function of the level lala saaslalKeynesianism
a saaClassicism
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ww
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w
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l a ia. O
i . O l a ia. O
i . O l a ia. O
i . O laalia. i.O
s a The
a l components of aggregate s a a l
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s a
P a
s
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4. Capitalism
i . O . rgrg
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Capitalism is rwell
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l al a i Net tax payments (T) l al a i has
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ww ww (Rf) ww 5. Rate of interestwisw w ww
ww
ww the foreigners
wwww ww ww ww aw Rate of interest is w a ww
w
Aggregate Supply = C + S + T + RF = Aggregate flow stock
rg g rgrg rgrg rgrg
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 i.O
aal la the
i.Oeconomy aal ali
a .Oi . O
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Sura’s
i . O . rgr-gXII Std - Economics
O i . O . rgrg
O i . O . rgrg
O Chapter
i. O . rgrg3
O
l al a i l al a i l al a i l al a i
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Answer the following questions in
one lpage i . O . rgrg
O i . O . r5grM
O g arks
i .O . rgrgunemployment.
O .O . rgrg
O
al a i l al a i (vi)
l al aStructural
i Unemployment l al:ia i
a d
a adsaasDescribe
35.
a
the types ofa d adsaasa
unemployment.
a a d aadsaasa (1) Structural unemploymenta daadsaasa is due to adaadsa
.P.P .P.P .P.P .P.P in the structure ofww .PP
ww ww ww ww
drastic change ww .

m
ww
ww Ans. Types of Unemployment
ww ww are, wwww wwww ww
the society.
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(ii)i .O . rgrg Unemployment i.O.O
O
Sesonal
rgrg i .(2)
O . rgrgFor example rise in i.demand
O O . rgrg for
O
l al a i l a la i l al a i mobile phone has l a
adversely
l a i affected
saas(iii)
a Frictional Unemployment saasa saasa saasa adsa

co
a daad a d
a ad a d
a ad the demand a da adfor cameras, tape Pad a
wwP
. .P (iv) Educated w P
. .P
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ww
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w ww w ww
w
(v) Technical Unemployment
w w w
(vii) Disguised unemployment :
r
O g
(vi).OStructural
r g Unemployment .O r
O gr g Disguised . O rgrunemployment
O g occursi.when O rgrgmore
O
a i i .
lala Disguised Unemployment a i i . a i i . a i .
saas(vii) saaslala aslala are working thanasawhat
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s.
P a daad (i) Cyclical P a d
a
Unemployment
ad : P a d
a ad required. P a da d P a daadsa
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ww P ww .. P ww .. P ww .. P ww.. P
ww
ww (1) wThis
ww
w unemployment exists w
ww
w
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w w www
36. Critically explain Say’s law of market.
the downturn phase of Trade cycle

ok
. O O g g
r r in the economy. i.O.O rrg g Ans. According
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O . O rgrg
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l alia i . l a l a i l a ia i .
l in the economy, they l a ia i .
l reward to
a daadsaasa (2) It is caused a d
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adsdeficiency
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asafirms
the factors of production. a da The
apay
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.
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ww
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w w ww
w receiving rewards w ww
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(ii) Seasonal Unemployment : spend the amount on the purchase of goods
o
O (1)
r gr g This type of
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O rgrg
O
l alia l a lia l al a i . l al a i
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asa product produced in athe
adsaeach a d d saaseconomy
a creates
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s
ab

. P. P a (2) In . P. P a
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wwww ww ww like sugar, production ww ww ww ww ww ww
ww windustries
w ww Criticisms ofw say’s
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i . O
i . O r some seasons. i . O
i . O i . O
i . O i . O
i . O
laala Frictional Unemployment
saas(iii) saaslaala: aslaalaAccording to Keynes,
sa(i) ala does not
saisasupply
slanot
d ad d ad d ad create its demand. d aIt
d applicable daadsa
ur

P
. .P a a (1) Frictional P a a
. .P unemployment arises P
. .P a a P a a
.P not increase as much
. does P
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wwww ww ww ww ww where demand ww ww ww ww
ww wdue
w to imbalance between supply ww of w w
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w w
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i . O . r
O r g
i . O . r
O r g (ii) i . . rgrg adjustment process
Automatic
O O i . O . Ogrg not
rwill
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..P a
P a P P a
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. ..P P a (iii) Money is not ..P a a
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P Individuals hold ..P a
P
wwww under
ww ww unemployment. ww ww ww ww ww ww
ww w w w w money ww for unforeseen contingencies w w
(iv) Educated Unemployment :
while businessmen keep cash reserve for
w

i . O . rgrg Sometimes educated

(1)
O i . O . rgrg are
people
O i . O rgrgactivities.
O
future
. i . O . rgrg
O
l al a i under employed l a l a i l a a i
asal Say’s law is based onathe l a
al a i
a daadsaasa when d adsaasaordoesunemployed
qualification
a a not match a d
a adsa(iv) a da d saasproposition that a daadsa
.
ww.P P w .
w.P P ww.. P P supply creates . P P
wwits. own demand and there .
ww. P P
w

ww
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ww
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(2) Faulty education system, Lack of
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l a ia O
. i.O l a a O
i . O l a ia.aO
i . O
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saasa l turnout etc.,aare l
saashighly
a responsible saasa l saasa is under
there
l
w

a a a s
. P. aa
P
d d for educated
. P. P
d d
a a unemployment in.P.P d
aa d employment inP
. .P
d d
capitalist
a a economies. . P. adaada
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wwww ww ww ww ww (vi) The need ww
wfor state intervention arises ww
winw
ww wIndia.
w ww ww w ww
(v) Technical Unemployment : the case of general over production and
O r
O gr g
. i.(1) Modern technology O r
O
. ibeinggr g .mass
O rgrunemployment.
O g .O Orgrg
l a ia l a ia . capital l a i
a i . l a ia i.
aa l l l l
a daadsas intensive d
a adsaasa less labourers adaadsaasa
requires
a a daadsas
aa
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P
. .P andww P
. P
contributes to technological P
. .P P
. .P P
. .P
ww
ww
ww ww .
wunemployment.
w wwww ww
ww ww ww
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Theories i . O . rofgrgEmployment andi.Income

O O . rgrg
O i Sura’s
. O . rgrg - XII Std - Economics
O i . O . rgrg
O
l al a i l al a i l al a i l al a i
a daadsaasa a daadsaasa a daadsaasa a daadsaasa a daadsa
.
ww.P P 37. Narrate the .
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ww. P to determination of .
ww.P P
ww
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i . O .
Under
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O i . O
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O i .O . rgrgare :
O i .O . rgrg
O
l al a i a simple two sector economy
l al a i consisting 1. l al a i
Aggregate demand - Aggregate
l al a i supply
a saasa of the householdsda saasaand the business dadsaasa approach a saasa s
. P. aa
P
d d . P. aa
P
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d . P.Paa . P. P
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ww sector wisw w ww ww approach ww
ww wtaken to understand wthe

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ww
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Diagram explanation :
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rthe
O .O rgrg and
O
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daadsas aggregate supply reach adsaasaequilibrium at adaadsa

co
P a households, P a
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w .P.P
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w
ww w decisions
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g
i . O
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O i .Oi . O i . O
i . O i .Oi . O
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sa They are able to produce a

s.
daadsas daadsa(iv) daadsasM1 N1 daadsa
1 1
P a P a dad P a P a P a
ww.. P y ww .. P AS ww ww.. P ..
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w P ..
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ww
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w of profit is M1 R1 ww ww
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O gr g . O r
O gr g . O
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O rg more labourers. i.O rgrg
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l alia i . l alia i . l a ia i .
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adsaasmore daadsa
Proceed and Cast

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ww. P M1 ww. . P .
ww. P stop oncew they . P
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ww
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ww w w w w ww
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o
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l alia.Oi . r
Or g
l alia.Oi . r
Or g
l alia O
i Ogrg supply
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l l i . O loss to
a saasa a saasa a saasa the producers. dadsaasa s
aad d R1 .P.Paad d d
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ww of effective demand .
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ww
ww wwww ww
ww (ix) Thus the wwwconcept
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O
l alia i . l alia i . l alia i . l alia i .
adad asaasa Employment
adadasaasa asaasa
adad adadasaasa adad asa
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i. O . Orgrg i . O . rgrg
O i . O . rgrg
O i . O . rgrg
O
a i a i a i a i
saaslaS.laNo. saaslala
Keynesianism saaslala Classicism salala
.s

P a d
a ad 1. Short-run P a d
aa d
equilibrium P a d
a ad
Long-run equilibrium P a daadas P a daadsa
..
ww P ww .. P ww.. P ww .. P ..
ww P
ww
ww 2. wwww
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ww
w

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Theories i . O . rofgrgEmployment andi.Income

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O i Sura’s
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O i . O . rgrg
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s.
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Technical Attributes of the

P
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P a d ..P a
P a d ..P a
P

Consumption Function

Consumption Function
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Consumption Function
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The Accelerator Principle
Concept Map

Meaning of
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Limitation

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Definition

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Meaning

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INVESTMENT FUNCTIONS
P a da P a da P a da P a da P a
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CONSUMPTION and

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Leakages of Multiplier

aal al a aal al a aal al a aal al a Marginal Efficiency

Marginal Efficiency
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Investment Function
Uses of Multiplier
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Classification of

P
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of Investment
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Multiplier

of Capital

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Multiplier

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P a daad P a daad P a daad P a daad P a daadsa

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w

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Relationship between Rate
of Interest and Investment

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Assumption of Multiplier

(K and β interaction)

Meaning of Investment
Working of Multiplier

Investments Function
Marginal Propensity

Types of Investment
Super Multiplier
Leverage Effect

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Determinants of

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to Consume

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d [email protected] d adsaaslala PH: 9600175757 d adsaasla/la8124201000 / d8124301000
adsaaslala daadsa
P
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