Economics Class 12 National Income and Related Aggregates
Economics Class 12 Chapter 2nd National Income and Related Aggregates
Very Short Questions
Question 1: What is national income?
Answer: The total income earned by the residents living within a country is called national income.
Question 2: Write the full form of GDP.
GDP
Answer: Gross Domestic Product
Question: What is GNP?
Answer: If we add the income from abroad to GDP, it is called GNP.
Question 4: Explain depreciation.
Answer: The decrease in the value of capital after wear and tear is called depreciation.
Question: What is aggregate demand?
Answer: The total demand in the economy is called aggregate demand.
Question: What are the components of aggregate demand?
Answer: Consumption demand and investment demand
Question: Write the formula for the consumption function.
Ans-a + by 30 = C =
Question: What is MPC? 900-
Marginal Propensity to Consume (MPC) is called 30-.
Question: Write the formula for MPC.
Ans- MPC = ΔC/ΔY
Question: What is the value of MPC?
Ans-Between 0 and 1 30-
Question: Write the formula for the investment multiplier.
Ans- K = 1/(1-MPC)
Long Questions
Question: What are the four factors of production, and what is the remuneration for each?
Ans- The following are the four factors of production:
1– Labour: Any kind of physical or mental work through which money can be earned is called labour.
Example: The daily wage earned by a labourer after working.
2- Land: In economics, all natural resources used are included in land.
Economics Class 12 Chapter 2nd National Income and Related Aggregates
3- Capital: Human-produced resources used in production are included in capital.
4- Entrepreneur: Entrepreneurs are individuals who have the courage to control and make decisions. Those who have the courage to take risks
Note:
① The remuneration for labour is called wages.
② The remuneration for land is called rent.
③ The remuneration for capital is called interest.
④ The remuneration for entrepreneurship is called profit.
Domestic Income: Domestic income includes income generated within the domestic boundaries of a country. This includes income earned by both Indian and non-Indian individuals.
Q. By what methods is national income calculated?
Answer – National income is calculated using the following 3 methods:
1. Production Method (Value Added Method)
2. Income Method
3. Expenditure Method
Q.4 What do you understand by depreciation? How does depreciation affect GDP?
A. Depreciation refers to the wear and tear of assets. Due to depreciation, the value of assets decreases. To obtain Net Domestic Product (NDP) from Gross Domestic Product (GDP), depreciation is subtracted from GDP.
Question 5 – Explain the difference between Real GDP and Nominal GDP.
Answer – Real GDP is an indicator of economic development.
Real GDP is measured at constant prices.
Nominal GDP: Nominal GDP is measured at current prices.
Q.6 What do you understand by economics and how many branches does it have?
A. Economics is a social science. It studies how humans use limited resources to fulfill their unlimited needs and wants. The study of economics reveals how the production, distribution, and consumption of goods and services are possible.
In other words, economics studies all the activities related to human life that make life better. This is called the scientific study of economics.
Question – What is meant by economics? Explain.
Answer – Economics has many definitions. Many scholars have defined it.
In Marshall’s words – Marshall defined economics as the study of the ordinary business of human life. In Robbins’ words, economics is the science that studies the relationship between limited resources and unlimited wants.
Types of Economics: Economics is mainly divided into two parts:
(i) Microeconomics
(ii) Macroeconomics
(i) Microeconomics: This branch of economics is also called microeconomics. It includes individual units.
Examples: Consumers, producers,
(ii) Macroeconomics: This is also called macroeconomics. This branch of economics studies the entire economy.
