Write in detail answer

V. Write in detail answer

1. Briefly explain various terms associated with measuring of national income.

Gross National Product (GNP): Gross National Product is the total value of goods and services produced and income received in a year by domestic residents of a country. It includes profits earned from capital invested abroad.

Gross Domestic Product (GDP): Gross Domestic Product (GDP) is the total value of output of goods and services produced by the factors of production within the geographical boundaries of the country.

Net National Product (NNP): Net-National Product (NNP) is arrived by making some adjustment with regard to depreciation. We arrive at the Net National Product (NNP) by deducting the value of depreciation from Gross National Product.

(NNP = GNP – Depreciation)

Net Domestic Product (NDP): Net Domestic Product (NDP) is a part of Gross Domestic Product. Net Domestic Product is obtained from the Gross Domestic Product by deducting the quantum of tear and wear expenses (depreciation)

(NDP = GDP – Depreciation)

Per Capita Income (PCI):

• Per capita Income is an indicator to show the living standard of people in a country. It is obtained by dividing the National Income by the population of a country.

• Per capita Income = National Income / Population

Personal Income (PI): Personal income is the total money income received by individuals and households of a country from all possible sources before direct taxes.

Disposable Income (DI): Disposable income means actual income which can be spent on consumption by individuals and families. DPI = PI - Direct Taxes

2. What are the methods of calculating Gross Domestic Product? and explain its.

Expenditure Approach: In this method, the GDP is measured by adding the expenditure on all the final goods and services produced in the country during a specified period.

Y = C + I + G + (X-M)

The Income Approach: This method looks at GDP from the perspective of the earnings of the men and women who are involved in producing the goods and services. The income approach to measure GDP (Y) is Y = Wages + rent + interest + profit

Value Added Approach: Take a cup of tea. It is the final goods. The goods used to produce it, tea powder, milk and sugar are intermediate goods. To measure the market value of the cup of tea is to add the value of each intermediate goods used in the production of it. The sum of the value added by all the intermediate goods used in the production gives us the total value of the final goods produced in the economy.

Example:

Value Added method: Tea powder + Milk + Sugar = Tea

                 Value of inter mediate goods = Value of final goods

3. Write about the composition of GDP in India.

Indian economy is broadly divided into three sectors.

Primary Sector: (Agricultural Sector)

• Agricultural sector is known as primary sector, in which agricultural operations are undertaken.

• Agriculture based allied activities, production of raw materials such as cattle farm, fishing, mining, forestry, corn, coal etc. are also undertaken.

Secondary Sector: (Industrial Sector)

• Industrial sector is the secondary sector in which the goods and commodities are produced by transforming the raw materials.

• Important  industries are Iron and Steel industry, cotton textile, jute, sugar, cement, paper, petrochemical, automobile and other small scale industries.

Tertiary Sector: (Service Sector)

• Tertiary sector is known as service sector.

• It includes scientific research, transport, communication, trade, postal and telegraph, banking, education, entertainment, healthcare and information technology etc.

• In the 20th century, economists began to suggest that, traditional tertiary services could be further distinguished from 'quaternary' and 'quinary' service sectors.

4. Write any five differences between the growth and development.

Economic Growth

Definition / Meaning : It is the positive quantitative change in the output of an economy in a particular time period 

Concept : Economic growth is the “Narrower” concept 

Nature of Approach : Quantitative in nature 

Scope : Rise in parameters like GDP, GNP, FDI,FII etc. 

Term / Tenure : Short term in nature 

Applicability : Developed nation 

Measurement Techniques : Increase in national income

Frequency of Occurrence : In a certain period of time 

Government Aid : It is an automatic process so may not require government support/aid or intervention

Economic Development

Definition / Meaning : It considers the rise in the output in an economy along with the advancement of HDI index which considers a rise in living standards, advancement in technology and overall happiness index of a nation.

Concept : Economic development is the “Broader” concept 

Nature of Approach : Qualitative in nature 

Scope : Rise in life expectancy rate, infant, improvement in literacy rate, infant mortality rate and poverty rate etc.

Term / Tenure : Long-term in nature 

Applicability : Developing economies 

Measurement Techniques : Increase in real national income i.e. per capita income 

Frequency of Occurrence : Continuous process 

Government Aid : Highly dependent on government intervention as it includes widespread policies changes so without government intervention it is not possible 

5. Explain the following the economic policies

i. Agricultural Policy

ii. Industrial policy

iii. New ecnomic policy

Agricultural policy:

• Agricultural policy is the set of government decisions and actions relating to domestic agriculture and imports of foreign agricultural products.

• Some over arching themes include risk management and adjustment, economic stability, natural resources and environmental sustainability, research and development and market access for domestic commodities.

• Price policy, land reform policy, irrigation policy and food policy are examples of Agricultural policy.

Industrial policy:

• Industrial development creates employment, promotes research and development, leads to modernization and makes the economy self sufficient.

• Industrial development also boosts agricultural sector, the service sector and also trade.

• Textile industry policy, Sugar industry policy, Small scale industrial policy and Industrial labour policy are some of the industrial policies.

New economic policy:

• The economy of India had undergone policy shifts in the beginning of the 1990s.

• This new model economic reform is known as the LPG or Liberalisation, Privatisation and Globalisation.

• These economic reforms had influenced the overall economic growth of the country in a significant manner. 

VI. Activity and Project

1. Students are collect the Gross Domestic Product datas of Tamilnadu and compare the other state of Karnataka and Kerala’s GDP. 

2. Students are collect the details of Employment growth of Tamilnadu.