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INDIAN ECONOMY ( ZIA SIR ) > 6.National Income Accounting and Aggregates-I > Flashcards

6.National Income Accounting and Aggregates-I Flashcards

1
Q

What is GDP?

A

GDP stands for Gross Domestic Product. It is the total value of all goods and services produced within the domestic territory of a country in a given accounting year.

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2
Q

What are the two types of GDP?

A

The two types of GDP are real GDP and nominal GDP.

Real GDP is the GDP at constant prices. This means that the prices of goods and services are adjusted to remove the effects of inflation.
Nominal GDP is the GDP at current prices. This means that the prices of goods and services are not adjusted for inflation.

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3
Q

What is NDP?

A

NDP stands for Net Domestic Product. It is the GDP minus depreciation. Depreciation is the wear and tear loss of capital goods.

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4
Q

What is depreciation?

A

Depreciation is the loss in value of capital goods over time due to wear and tear. It is an expense that businesses incur to maintain their assets.

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5
Q

What does Gross Domestic Product (GDP) represent?

A

Gross Domestic Product is the total value of all goods and services produced within a country’s domestic territory during a given accounting year.

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6
Q

What are the two types of GDP?

A

The two types of GDP are Real GDP, which is calculated at constant prices, and Nominal GDP, which is calculated at current prices.

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7
Q

What is Net Domestic Product (NDP)?

A

Net Domestic Product is the value of goods and services produced within a country’s domestic territory minus depreciation.

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8
Q

How is depreciation defined?

A

Depreciation is the reduction in value due to wear and tear of machinery and physical parts. For instance, if a bike’s value decreases from 1 lakh to 90,000 rupees in a year, the 10,000 rupee loss is due to depreciation.

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9
Q

What is GNP?

A

GNP stands for Gross National Product. It is the total value of all goods and services produced by a country’s residents, regardless of where they are produced.

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10
Q

What is NNP?

A

NNP stands for Net National Product. It is the GNP minus depreciation.

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11
Q

What is Gross National Product (GNP)?

A

Gross National Product is the total money value of all goods and services produced by a country’s normal residents during a financial year.

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12
Q

What does Net National Product (NNP) represent?

A

Net National Product is the total value of finished goods and services produced by a country’s citizens both domestically and overseas, minus depreciation.

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13
Q

What is the difference between price and cost?

A

The difference between price and cost is that price is the amount a customer is willing to pay for a product or service, while cost is the total expense incurred for making a product or service that is sold by a company.

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14
Q

What is the difference between customer and consumer?

A

The difference between customer and consumer is that a customer is someone who buys a product or service, while a consumer is someone who uses the product or service.

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15
Q

How is NNP calculated?

A

Net National Product is calculated as NNP = GNP - Depreciation.

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16
Q

What’s the difference between Price and Cost?

A

Cost refers to the total expense incurred by a company to create a product or service, while Price is the amount customers are willing to pay for that product or service.

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17
Q

What is the difference between real GDP and nominal GDP?

A

The difference between real GDP and nominal GDP is that real GDP is adjusted for inflation, while nominal GDP is not. This means that real GDP is a better measure of economic growth than nominal GDP.

18
Q

What is the difference between GDP and GNP?

A

The difference between GDP and GNP is that GDP measures the total value of goods and services produced within a country’s borders, while GNP measures the total value of goods and services produced by a country’s residents, regardless of where they are produced.

19
Q

Can a customer and a consumer be the same?

A

Yes, a customer and a consumer can be the same, but in certain cases, customers who purchase products may not be the final consumers of those products.

20
Q

Provide an example of a situation where customers and consumers differ.

A

In the case of baby products, parents may be the customers who buy the products, while the babies are the consumers who use them.

21
Q

What is a discount?

A

A discount is a reduction in the price of a product or service.

22
Q

What is a subsidy?

A

A subsidy is a government payment to producers or consumers of a good or service.

23
Q

What is direct benefit transfer (DBT)?

A

DBT is a system where the government directly transfers money to the beneficiaries, bypassing intermediaries.

24
Q

What is factor cost?

A

Factor cost is the cost of production of a commodity from the producer’s side. It includes the cost of raw materials, labor, and capital.

25
Q

How does a discount affect the price of an item?

A

A discount reduces the price of an item by a certain percentage. For instance, a 20% discount on a 100-rupee item means the customer pays 80 rupees.

26
Q

Explain the concept of Direct Benefit Transfer (DBT).

A

DBT is when the government credits a subsidy amount directly to the seller’s bank account. For example, if a seller gets a 20% government subsidy on an item, the government directly deposits 20 rupees to the seller’s account.

27
Q

What is the difference between Factor Cost and Market Price?

A

Factor Cost is the production cost from the producer’s perspective, while Market Price is the final value after adding indirect taxes and subtracting subsidies.

28
Q

What are some aggregates of national income?

A

Aggregates of national income include GDP at Market Price, GDP at Factor Cost, NDP at Market Price, NDP at Factor Cost, GNP at Market Price, GNP at Factor Cost, NNP at Market Price, and NNP at Factor Cost.

29
Q

What is market price?

A

Market price is the final value of a commodity after adding the indirect taxes to the factor cost of the product. It is the price that consumers pay for goods and services.

30
Q

What are the aggregates of national income?

A

The aggregates of national income are the different measures of the total income generated in an economy. They include GDP, NDP, GNP, NNP, and GVA.

31
Q

What is GDP?

A

GDP stands for Gross Domestic Product. It is the total value of goods and services produced in an economy in a given year.

32
Q

What are the data sources for GDP calculation?

A

The data sources for GDP calculation include the Annual Survey of Industries (ASI) and the Ministry of Corporate Affairs (MCA21) database.

33
Q

How is GDP calculated before and after 2015?

A

Before 2015, GDP was calculated at factor cost, and after 2015, it’s calculated at market price. The base year shifted from 2004-05 to 2011-12.

34
Q

What’s the data source for GDP calculation before 2015?

A

Before 2015, GDP data came from the Annual Survey of Industries (ASI), a survey of manufacturing industries conducted by the Ministry of Statistics and Programme Implementation.

35
Q

Why is GDP at market price used to measure economic growth?

A

GDP at market price is used to measure economic growth because it takes into account the effects of taxes and subsidies. Taxes and subsidies can have a significant impact on the value of goods and services produced in an economy.

36
Q

What is gross value added (GVA)?

A

GVA is defined as the value of output minus the value of intermediate consumption. It is the measure of contribution to growth made by the individual, industrialists, producers, and sectors.

37
Q

What’s the data source for GDP calculation after 2015?

A

After 2015, GDP data comes from MCA21, a database allowing firms to electronically file their financial results, managed by the Ministry of Corporate Affairs.

38
Q

Why is GDP at Market Price a better measure of economic growth?

A

GDP at Market Price considers taxes and subsidies, providing a more accurate representation of economic growth’s impact, unlike GDP at Factor Cost.

39
Q

What is Gross Value Added (GVA)?

A

Gross Value Added is the output value minus intermediate consumption, representing individual, industrial, producer, and sector contributions to growth.

40
Q

How is a government subsidy directly transferred to sellers?

A

A government subsidy is directly credited to a seller’s bank account, a process known as Direct Benefit Transfer (DBT).

INDIAN ECONOMY ( ZIA SIR ) (10 decks)

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