Define budget deficit and trade deficit. The excess of private investment over saving of a country in a particular year was Rs 2,000 crores. The amount of budget deficit was (– )Rs 1,500 crores. What was the volume of trade deficit of that country?
Budget deficit means when the amount by which government expenditure exceeds the tax revenue earned by government and trade deficit means when the amount of import expenditure exceeds the export revenue earned by the economy.
Budget deficit = G - T
G is government expenditure
T is government income that is tax revenue
Trade deficit = M - T or (I - S) + (G - T)
M is import expenditure
T is export revenue
I is Investment X Inflow into the country
S is saving
It is given that,
I - S = Rs.2000 crores.
G - T = (-) Rs.1500 crores.
Trade deficit = [I - S] + [G - T]
= 2000 + [-1500]
= Rs.500 crores.
Net National Product at Factor Cost of a particular country in a year is Rs 1,900 crores. There are no interest payments made by the households to the firms/government, or by the firms/government to the households. The Personal Disposable Income of the households is Rs 1,200 crores. The personal income taxes paid by them is Rs 600 crores and the value of retained earnings of the firms and government is valued at Rs 200 crores. What is the value of transfer payments made by the government and firms to the households?
(a) Net Domestic Product at factor cost
(b) Net Factor Income from abroad
(c) Undisbursed Profit
(d) Corporate Tax
(e) Interest Received by Households
(f) Interest Paid by Households
(g) Transfer Income
(h) Personal Tax
In a single day Raju, the barber, collects Rs 500 from haircuts; over this day, his equipment depreciates in value by Rs 50. Of the remaining Rs 450, Raju pays sales tax worth Rs 30, takes home Rs 200 and retains Rs 220 for improvement and buying of new equipment. He further pays Rs 20 as income tax from his income. Based on this information, complete Raju’s contribution to the following measures of income (a) Gross Domestic Product (b) NNP at market price (c) NNP at factor cost (d) Personal income (e) Personal disposable income.
The value of the nominal GNP of an economy was Rs 2,500 crores in a particular year. The value of GNP of that country during the same year, evaluated at the prices of same base year, was Rs 3,000 crores. Calculate the value of the GNP deflator of the year in percentage terms. Has the price level risen between the base year and the year under consideration?