11 Most VSAQ’s of National Income Analysis Chapter in Inter 1st Year Economics (TS/AP)

2 Marks

VSAQ-1 : What is National income?

National income is the total value of goods and services produced by a country’s residents within a specific time period, typically a year. It encompasses all economic activities within the country’s borders, whether performed by its citizens or foreign residents. National income is a crucial measure of a country’s economic performance and is calculated using various methods to ensure accuracy and reliability.

VSAQ-2 : Mention the factors that determine National Income.

National income is influenced by several key factors:

  1. Labor: The workforce’s size and productivity.
  2. Capital: Availability of physical and financial assets.
  3. Natural Resources: Abundance and utilization.
  4. Technology: Advancements and innovation.
  5. Entrepreneurship: Dynamic entrepreneurs.
  6. Government Policies: Taxation, regulation, and incentives.
  7. Global Conditions: International trade and investment.
  8. Population: Size and demographics.
  9. Investment: Domestic and foreign capital inflow.

VSAQ-3 : Explain the concept of Gross National Product. (OR) Gross National product.

Gross National Product (GNP) represents the total value of goods and services produced by a country’s residents, including their earnings from abroad, while excluding the income earned by foreign residents within the country. It is calculated by adding consumption (C), gross investment (I), government spending (G), and net exports (X-M), where X represents exports and M represents imports. GNP provides a comprehensive view of a nation’s economic output, considering both domestic and international economic activities.

VSAQ-4 : Distinguish between per capita income and National income.

  1. Per Capita Income represents the average income per person in a country, calculated by dividing the total national income by the population. It reflects income distribution.
  2. National Income, in contrast, is the total economic output of a country, without considering population. It serves as a macroeconomic indicator of a nation’s economic performance.

VSAQ-5 : Expand C.S.O What is responsibility?

C.S.O. (Central Statistical Organization) is responsible for collecting and analyzing statistical data, including the preparation of key economic indicators like Gross National Product (GNP). Its primary role is to support economic planning and policymaking by providing accurate and up-to-date statistical information to aid in informed decision-making.

VSAQ-6 : What is depreciation? (OR) Depreciation.

Depreciation refers to the cost associated with the wear and tear of produced goods and services, encompassing the expenses for their renewal or repair.

VSAQ-7 : Write a note on per capita income. (OR) What is per capita income? (OR) Per capita income.

Per capita income is the average income of individuals in a country for a specific year. It is calculated by dividing the national income of that year by the population of that year. To account for inflation and changes in the value of money, real per capita income is often measured, which adjusts for these factors to provide a more accurate representation of individuals’ actual income.

VSAQ-8 : What is real per capita income?

Real per capita income is a measure of the average income of individuals in a country, adjusted for inflation and changes in the value of money. It is calculated by dividing the real national income (which accounts for inflation) by the population of the country. This provides a more accurate representation of individuals’ actual income levels, taking into account the purchasing power of their income in a specific year.

VSAQ-9 : What are transfer payments? Give examples.

Transfer payments are government payments made to individuals, households, or businesses without receiving goods or services in return. Examples include Social Security, unemployment benefits, welfare, and more. They aim to redistribute income and provide financial assistance.

VSAQ-10 : Disposable Income

Disposable income is the money an individual or household has available for spending and saving after deducting taxes from their total income.

VSAQ-11 : What is Personal Income?

Personal income is the total income received by individuals from all sources before taxes and other deductions. It includes wages, salaries, rental income, interest, dividends, and various forms of government transfers.