Time : 3 hours Max. Marks : 80 SECTION A. (b) increase in expenditure on it (d) any one of the above

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1 General Instructions 1. All questions in both the sections are compulsy. However, there is internal choice in some questions. 2. Marks f questions are indicated against each question. 3. Question nos. 1 to 5 and 16 to 20 are very sht answer questions carrying 1 mark each. They are required to be answered in one sentence. 4. Question nos. 6 to 8 and 21 to 23 are sht answer questions carrying 3 marks each. Answers to them should not nmally exceed 60 wds each. 5. Question nos. 9 to 11 and 24 to 26 are also sht answer questions carrying 4 marks each. Answer to them should not nmally exceed 70 wds each. 6. Question nos. 12 to 15 and 27 to 30 are long answer questions carrying 6 marks each. Answer to them should not nmally exceed 100 wds each. 7. Answers should be brief and to the point and the above wd limit be adhered to as far as possible. Time : 3 hours Max. Marks : 80 ECTION A 1. The demand of a commodity when measured through the expenditure approach is inelastic. A fall in its price will result in : (Choose the crect alternative) (a) no change in expenditure on it (c) decrease in expenditure on it Ans. (c) decrease in expenditure on it (b) increase in expenditure on it (d) any one of the above 2. As we move along a downward sloping straight line demand curve from left to right, price elasticity of demand : (Choose the crect alternative) (a) remains unchanged (c) goes on rising Ans. (b) goes on falling (b) goes on falling (d) falls initially then rises 3. efine market demand. Ans. Market demand can be defined as the sum total of individual demands at different price levels at a particular period of time.

2 4. Average revenue and price are always equal under : (Choose the crect alternative) (a) perfect competition only (c) monopoly only Ans. (d) all market fms (b) monopolistic competition only (d) all market fms 5. tate any one feature of oligopoly. Ans. One distinct feature of oligopoly is non-price competition. 6. istinguish between microeconomics and macroeconomics. Ans. ifferences between microeconomics and macroeconomics are Basis Microeconomics Macroeconomics Meaning Area of study cope It is that branch of economics which studies individual economic variables like demand, supply, price, etc. It deals with determination of price and output in individual market. It has a narrow scope, i.e. an individual person, an individual market, etc. It is the branch of economics which studies aggregate economic variables like Aggregate emand, Aggregate upply, price level, etc. It deals with determination of general price level and national output of the country. It has a very wide scope i.e. a country as a whole. (1 3 = 3) 7. tate the meaning and properties of production possibilities frontier. Ans. Refer to Q. No. 6 of All India et I. 8. how that demand of a commodity is inversely related to its price. Explain with the help of utility analysis. Why is an indifference curve negatively sloped? Explain. Ans. The table given below shows that demand of a commodity is inversely related to its price. emand schedule Price (`) Quantity demanded (units) The Law of iminishing Marginal Utility states that as a consumer consumes successive units of an identical commodity, then Marginal Utility derived from an additional unit goes on declining. This implies that as a consumer s utility is declining, then he would not be willing to buy an additional unit at the same price. But, if the good is offered to him at a reduced price, then this will induce him to increase his consumption. o, we can say that price and demand of a commodity are inversely related due to Law of iminishing Marginal Utility. (2)

3 An indifference curve always slopes downward from left to right, i.e. it has a negative slope. It is because of the simple reason that if a consumer wants to have me units of one good, he will have to reduce the number of units of the another good, because of his limited income. It should however be remembered that all combinations of two goods, plotted on an indifference curve give the same level of satisfaction. (2) Good Good ownward sloping indifference curve 9. Explain the conditions of consumer s equilibrium under indifference curve approach. (4) Ans. Accding to indifference curve analysis, consumer s equilibrium is at a point where the slope of indifference curve is equal to the slope of budget line price line. The conditions of the consumer s equilibrium are : (i) MR xy = P x, where P y MR xy = Marginal Rate of ubstitution of good and good P x = Price of good P y = Price of good, and (ii) At the point of equilibrium, indifference curve must be convex to the igin. It implies that at the point of equilibrium, MR must be diminishing. In the diagram given, P is the equilibrium point at which budget line touches the Indifference Curve IC tate different phases of the law of variable proptions on the basis to Total Product. Use diagram. Explain the geometric method of measuring price elasticity of supply. Use diagram. (4) Ans. There are three stages of the law of variable proptions. The behaviour of Total Product in each of the three stages is discussed below tage I Increasing Returns to Fact In this stage, Total Product increases at an increasing rate. Good tage II iminishing Returns to Fact M O A P B Good In this stage, Total Product increases, but at a diminishing rate. Also, in this stage Total Product reaches its maximum and becomes constant. IC 2 IC 1 M IC 3

4 tage III Negative Returns to Fact In this stage, Total Product begins to fall. The graph given below, depicts the behaviour of Total Product across the three stages. T Maximum point of TP tage I tage II tage III TP Point of inflexion K O L Units of variable fact behaviour of total product in different stages Geometrically, Elasticity of upply depends on the igin of the supply curve and can be computed with the help of the fmula given below Intercept on - axis E s = Quantity at that Price F a positively sloped straight line supply curve, there can be three possible situations: (i) E s =1, when a straight line, positively sloped supply curve starts from the point of igin. (ii) E s >1, when a straight line, positively sloped supply curve starts from -axis. (iii) E s <1, when a straight line, positively sloped supply curve starts from -axis Price ( ` ) E s >1 E s =1 E s <1 Quantity (units) Graph depicting elasticities of supply 11. Explain the Free entry and exit of firms feature of monopolistic competition. (4) Ans. Monopolistic competition is a market fm which is characterised by the presence of large number of buyers and sellers dealing in differentiated product. One of the imptant feature of monopolistic competition is Free entry exit of firm. Firms are free to enter the industry leave the industry under monopolistic competition. There are no legal restrictions in this regard. However new firms, do not have absolute freedom to manufacture products absolutely similar to those produced by existing firms. Products of some firms may be legally patented. New firms cannot produce those products. e.g. no rival firm can produce sell a patented item like Woodland shoes. Also, a firm may leave the industry if it incur losses.

5 12. When price of a commodity falls by 10%, its demand rises from 150 units to 180 units. Calculate is price elasticity of demand. How much should be the percentage fall in its price so that its demand rises from 150 to 210 units? (6) Ans. Old quantity demanded (Q) = 150 units New quantity demanded = 180 units Change in quantity demanded ( Q) = = 30 units Q 30 Percentage change in quantity demanded = 100 = 100 = 20% Q 150 Percentage change in price = 10% (given) We know that, Elasticity of emand ( E d ) = E d = 2 Now, accding to the given condition, Old quantity demanded ( Q ) = 150 units New quantity demanded = 210 units Percentage change in quantity demanded Percentage change in price = 20 10, Change in quantity demanded ( Q ) = = 60 units Q 60 Percentage change in quantity demanded = 100 = 100 = 40% Q 150 We know that, Percentage change in quantity demanded Elasticity of emand = Percentage change in price 40 2 = Percentage change in price Percentage change in price = 40 = 20% Complete the following table. (6) Ans. Output (units) Total Cost (`) Average Variable Cost (`) 0 30 Marginal Cost (`) Average Fixed Cost (`) Output (units) Total Cost (`) Average Variable Cost (`) Marginal Cost (`) Average Fixed Cost (`) (5)

6 Fmulae used : TC = TFC + TVC Σ MC AVC = TVC Output MC = TC N TC N 1 ; AFC = TFC Output 14. Good is a substitute of good. The price of falls. Explain the chain of effects of this change in the market of. Explain the chain of effects of excess supply of a good on its equilibrium price. (6) Ans. With a fall in the price of, the demand of (substitute of ) decreases. As a result, demand curve of shifts to the left. Accdingly, the equilibrium price of would tend to decrease and also equilibrium quantity tends to decrease. (2) Price ( ` ) P P 1 O 1 E 1 Q 1 Q Quantity of coffee The figure shows a situation of decrease in demand. The demand curve shifts leftwards. Consequently, equilibrium price and quantity, both are decreasing from OP toop 1 andoq tooq 1 respectively. (4) By definition, equilibrium price refers to the price at which market demand is equal to market supply (i.e. there is no excess demand excess supply). When price prevailing in the market in higher than the equilibrium price, demand will be less than supply i.e. there is excess supply in the market. Excess supply will fce the market price to slide down causing an extension of demand and contraction of supply. The process of an extension and contraction would continue till the equilibrium between supply and demand is struck. Thus, equilibrium price will be rested through the free play of market fces. (4) 15. Given below is the cost schedule of a product produced by a firm. The market price per unit of the product at all levels of output is ` 12. Using marginal cost and marginal revenue approach, find out the level of equilibrium output. Give reasons f your answer. (6) Output (units) Average Cost (`) E 1 Excess supply iagram showing the decrease in equilibrium price and quantity Price ( ` ) P P 1 O Excess supply Q 1 Q Q 2 Quantity (units) etermination of equilibrium price E (2)

7 Ans. Cost and revenue schedule of the firm Output (units) Average Cost (`) Total Cost (`) Marginal Cost Average Revenue (`) Total Revenue (`) Marginal Revenue (`) A firm is in equilibrium subject to the fulfillment of the following two conditions (i) Marginal Cost (MC) should be equal to Marginal Revenue, (MR) and (ii) Beyond the point of equilibrium, MC should tend to rise. A carefull study of the above table reveals that MR and MC are both equal when the output is 1 unit and 5 units. However, the firm will be at equilibrium only at the output level of 5 units, because both the conditions of equilibrium are fulfilled at this level of output. (4) (2) ECTION B 16. The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called : (Choose the crect alternative) (a) tatuty liquidity ratio (c) Cash reserve ratio Ans. (c) Cash reserve ratio (b) eposit ratio (d) Legal reserve ratio 17. Aggregate demand can be increased by : (Choose the crect alternative ) (a) increasing bank rate (b) selling government securities by Reserve Bank of India (c) increasing cash reserve ratio (d) None of the above Ans. (d) None of the above 18. Give the meaning of involuntary unemployment. Ans. Involuntary unemployment refers to a situation where some people are not getting wk, even when they are willing to wk at the existing wage rate. 19. What is primary deficit? Ans. Primary deficit is equal to fiscal deficit less interest payments. ymbolically, Primary eficit = Fiscal eficit Interest Payments. 20. Give the meaning of balance of payments. Ans. Balance of payments of a country is a systematic recd of all the economic transactions between the residents and non-residents of a country.

8 21. istinguish between final goods and intermediate goods. Give an example of each. Ans. ifferences between intermediate goods and final goods are Basis Intermediate goods Final goods Meaning Production boundary These goods may be used as raw materials f the production of other goods during the accounting year. These goods remain within the boundary line of production and are not ready f use by their final users. These goods are not used as raw materials f the production of other goods during the accounting year. These goods are outside the boundary line of production and are ready f use by their final users. Examples teel used in the production of cars. A microwave oven ( 1 3 = 3) 22. Explain the ste of value function of money. tate the meaning and components of money supply. Ans. Money is an asset that retains its value over time. People ste their wealth in the fm of money without fearing f loss in its value. Money overcomes the problem of sting perishable item under barter system of exchange. With money, people hold liquidity and value in a much me convenient manner. The total stock of money in circulation among the public at a particular point of time is called money supply. Money supply comprises of the following components (i) Currency (notes and coins) held by the public. (ii) Net demand deposits and time deposits held by the commercial banks. (iii) Other deposits held by the Central Bank. (iv) Total deposits with post office (excluding National aving Certificates) 23. Explain the basis of classifying taxes into direct and indirect tax. Give examples. Ans. The basis of classifying taxes into direct and indirect taxes in shifting the impact of tax. irect taxes are those taxes f which the incidence and impact of tax falls on the same person, i.e. actual burden of taxes cannot be shifted, e.g. income tax, cpation tax etc. Whereas indirect taxes are those taxes f which the incidence and impact fall on separate persons, i.e. burden of these taxes can be shifted to others, e.g. service tax, entertainment tax etc. 24. Explain banker to the government function of the Central Bank. (4) Explain the role of reverse repo rate in controlling money supply. Ans. The Central Bank is an apex institution of a country which operates, controls, directs and regulates the monetary and financial system of the country. One of the imptant function of Central Bank is Banker to the Government. Central Bank acts as a banker, advis and agent to the Central and tate Governments. As the common public keep their cash balance, demand deposits and time deposits with Commercial Banks; in the same way, the Central Bank manages the cash reserves and demand deposits of governments in current accounts. It carries out the exchanges, remittance and other banking operations on behalf of the government. It issues loans and advances to the government and buys and sells securities on behalf of government. It also advises to government on the fiscal policy of the country. That is why, the Central Bank is called as government s bank.

9 Reverse Repo Rate is the rate of interest at which commercial banks can deposit their surplus funds with the Central Bank, f a sht period of time. It is an imptant quantitative tool f controlling money supply in the economy. If the Central Bank wants to increase money supply in the economy, then, it reduces the reverse repo rate. With fall in reverse repo rate the commercial banks reduce the deposits of surplus funds with the Central Bank, thereby increasing the money supply. On the other hand, if the Central Bank wants to decrease money supply, then it increases the reverse repo rate. With rise in reverse repo rate, the commercial banks increase the deposits of surplus funds with the Central Bank, thereby decreasing the money supply. Thus, reverse repo rate plays an imptant role in controlling money supply. 25. Explain how government budget can be used to influence distribution of income? (4) Ans. Government budget brings fth the government s policy related to taxation and subsidies. The government uses these fiscal instruments with a view to improve the distribution of income and wealth in the economy. e.g. in India, progressive tax structure is followed i.e. tax rate increases with increase in income. o, government collects me taxes from the richer sections of society and uses the amount so collected to provide social infrastructure in the fm of schools and hospitals f the underpriviliged sections of society, thus facilitating equitable distribution of income. Also, the government can ask the richer sections of society to give up their share of subsidies, voluntarily. The scheme Pehal launched by the government is a step in this direction in which the financially able people of the society are requested to give up their LPG subsidy. (4) 26. An economy is in equilibrium. From the following data about an economy calculate autonomous consumption. (a) Income = 5000 (b) Marginal propensity to save = 0.2 (c) Investment expenditure = 800 (4) Ans. Given, Income ( ) = 5000, Marginal Propensity to ave (MP) = 0.2, and Investment Expenditure = 800 We know that, MP+MPC = 1, On substituting MP= 0.2, we get MPC (b) = = 0.8 We also know that at the point of equilibrium, avings = Investment. avings = 800 Now, Income = Consumption + avings 5000 = C + b , where C = Autonomous consumption and b = C = C C = = 200 = MPC. Autonomous consumption in the economy = 200 (4)

10 27. Why does the demand f feign currency fall and supply rises when its price rises? Explain. (6) Ans. Feign exchange rate shares an inverse relationship with the demand f the currency. With a fall in the price of feign exchange, value of domestic currency increases (i.e. appreciation of domestic currency) and that means feign goods become cheaper and their domestic demand (i.e. impts) increases. The rising domestic demand f feign goods implies higher demand f feign exchanges which increases fromoq 1 tooq 2 as shown in the figure Rate of exchange P 1 P 2 The supply of feign currency is directly proptional to the price of feign exchanges. When the price of a feign currency falls, it leads to cheaper impts and expts because it leads to appreciation of domestic currency. The expters are discouraged due to costlier expts. This results lesser inflow supply of feign currency in the economy. As a result supply of feign exchange decreases fromoq 2 tooq 1 as shown in the figure. O Q 1 Q 2 Quantity of feign exchange emand Curve of Feign Exchange Rate of exchange R 2 R O Q 1 Q 2 upply of feign currency upply Curve of Feign Exchange 28. Explain non-monetary exchanges as a limitation of using gross domestic product as an index of welfare of a country. (6) How will you treat the following while estimating domestic product of a country? Give reasons f your answer: (a) Profits earned by branches of country s bank in other countries (b) Gifts given by an employer to his employees on independence day (c) Purchase of goods by feign tourists (6) Ans. Gross omestic product (GP) is the total value of all the final goods and services produced by all the enterprises (both resident and non-resident) within the domestic territy of a country in a particular year. GP is considered as one of the best indicats of judging the economic perfmance of a country. GP may be a good indicat of economic growth, but not of economic welfare economic development. One of the reason f this is that non-monetary transactions are igned, while calculating GP. (2)

11 The non-monetary exchanges which take place in the infmal sects are not included in the calculation of Gross omestic Product (GP) since money is not being used. F example, service of a housewife while teaching her children while cooking food in kitchen. This results in under estimation of GP. Hence, GP calculated in the standard manner may not give us a clear indication of the productive activity and actual welfare of the country. (4) (a) Profits earned by branches of country s bank in other countries It is not included while estimating the domestic product of a country as these profits are not earned within the domestic territy of the country. (b) Gifts given by an employer to his employees on independence day It is not included while estimating the domestic product of a country as it is a transfer payment. (c) Purchase of goods by feign tourists It will be included in the estimation of domestic product of a country as the goods have been produced and sold within the domestic territy of the country. ( 2 3 = 6) 29. Calculate (a) Net omestic Product at Fact Cost and (b) Gross National isposable Income (6) ` in cres (i) Private final consumption expenditure 8000 (ii) Government final consumption expenditure 1000 (iii) Expts 70 (iv) Impts 120 (v) Consumption of fixed capital 60 (vi) Gross domestic fixed capital fmation 500 (vii) Change in stock 100 (viii) Fact income to abroad 40 (ix) Fact income from abroad 90 (x) Indirect taxes 700 (xi) ubsidies 50 (xii) Net current transfers to abroad ( ) 30 Ans. (a) Gross omestic Product at Market Price (GP MP ) = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross omestic Fixed Capital Fmation + Change in tock + (Expts Impts) = ( )= ` 9550 cres. Net omestic Product at Fact Cost (NP FC ) = GP MP Consumption of Fixed Capital Net Indirect Taxes = ( )= ` 8840 cres (4) (b) Gross National isposable Income = GP MP + Net Fact Income from Abroad Net Current Transfers to Abroad = ( 90 40) ( 30)= = ` 9630 cres. (2) 30. Assuming that increase in investment is ` 1000 cre and marginal propensity to consume is 0.9, explain the wking of multiplier. (6) Ans. Investment multiplier simply the multiplier is measured as a ratio between change in output /income and change in investment. Change in Income ( ) ymbolically, Investment multiplier (K) = Change in Investment ( I) Also, there is a direct relationship between investment multiplier and Marginal Propensity to Consume (MPC). Multiplier can also be estimated by using the following fmula 1 K = 1 MPC

12 o, if MPC = 0. 9, then 1 1 K = = = Now, if the investment increases by ` 1000 cres, then increase in income can be computed by substituting the values in the following fmula K = 10 = I 1000 Change in Income ( ) =` cres o, if investment increases by ` 1000 cres and MPC = 0.9, then in such an instance, income will increase by ` cres. (Only Uncommon Questions from et I) ECTION A 6. Explain the problem of What to produce Ans. An economy has millions of commodities to produce. It has to decide which goods and services to be produced and also what should be its sufficient quantity. e.g. an economy has to decide whether to produce luxury goods inferi goods, capital goods consumer goods. (2) This problem has two dimensions: (a) Types of goods to be produced. (b) Quantity of goods to be produced. 9. A consumer consumes only two goods. Explain the conditions of consumer s equilibrium using utility analysis. Ans. In case of two commodities, consumer attains equilibrium, when : MU MU = = MU p M, Where p MU and MU = Marginal utilities of good and good, respectively, P and P = Prices of good and good, respectively, and MU = Marginal utility of money M It implies that in state of equilibrium, utility per rupee obtained by the consumer from good good should be equal to Marginal Utility of money. (2) Also, if we assume MU M = 1, then the above condition can be written as MU MU = P P It implies that in state of equilibrium, utility per rupee from good must be equal to utility per rupee from good, The above condition can also be written as : MU P = MU P It implies that in state of equilibrium, ratio of Marginal Utilities of two commodities is equal to the ratio of their prices. (4)

13 14. and are complementary goods. The price of falls. Explain the chain of effects of this change in the market of. Explain the chain of effect of excess demand of a good on it equilibrium price. (6) Ans. In case of complementary goods, when the price of falls, demand f commodity increases. As a result, demand curve of commodity will shift towards right, but supply curve remains constant. ue to increase in demand of commodity due to competition amongst the buyers there will be situation of excess demand. Therefe, suppliers will be motivated to increase the price of commodity. Therefe, equilibrium price and equilibrium quantity would tend to increase. (4) Price ( ` ) P 1 P O 1 E Q 1 Q Q 2 Quantity (units) The above figure shows a situation of increase in demand. The demand curve shifts to right. Consequently, equilibrium price and quantity both are increasing fromop toop 1 andoq tooq 1 respectively. (2) E 1 Excess demand refers to the situation is which market demand exceeds market supply, cresponding to a particular price. By definition, equilibrium price refers to the price at which market demand equals market supply. Excess demand in the market will create competition among the buyers, which will push the price upwards, causing contraction in demand (by Law of emand) and extension in supply (by Law of upply). This process will continue till the equilibrium is achieved, where again market demand will be equal to market supply. Thus, equilibrium price will be rested through the free plays of market fces, as shown in the diagram given alongside. In the given diagram and are demand and supply curves respectively and equilibrium is at point e where demand equals supply with equilibrium priceop and equilibrium quantityoq. Any price belowop will create excess demand. At priceop 1 demand equalsoq d and supply isoq s, creating excess demand equal toq s Q d. This will cause the price to rise till the time it reached toop, at which level equilibrium will be rested. Excess demand 1 iagram showing a situation of excess demand Price ( ` ) P P 1 O A Q s Q Q d Quantity (units) Excess demand iagram showing Excess emand B

14 ECTION B 17. What is revenue deficit? Ans. Revenue deficit in a government budget is the excess of revenue expenditure over revenue receipts. 27. Assuming that increase in investment is ` 800 cre and marginal propensity to consume is 0.8, explain the wking of multiplier. (6) Ans. Change in Income = ` 4000 cres olve as Question No. 30 of elhi et I 29. Calculate (a) National Income (b) Net National isposable Income : (6) ` in cres (i) Net fact income to abroad ( ) 50 (ii) Net indirect taxes 800 (iii) Net current transfers fm rest of the wld 100 (iv) Net impts 200 (v) Private final consumption expenditure 5000 (vi) Government final consumption expenditure 3000 (vii) Gross domestic capital fmation 1000 (viii) Consumption of fixed capital 150 (ix) Change in stock ( ) 50 (x) Mixed income 4000 (xi) cholarship to students 80 Ans. (a) Gross omestic Product at Market Price (GP MP ) = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross omestic Capital Fmation Net Impts = = ` 8800 cres National Income = GP MP Consumption of Fixed Capital Net Fact Income to Abroad Net Indirect Taxes = ( 50) 800 = ` 7900 cres (4) (b) Net National isposable Income = National Income + Net Indirect Tax + Net Current Transfers from Rest of the Wld = = ` 8800 cres (2)

15 (Uncommon Questions from et I and et II) ECTION A 6. Explain the problem of how to produce. Ans. Refer to Q. No 7 of All India et I 9. Explain the meaning of diminishing marginal rate of substitution with the help of an example. Ans. Refer of Q. No 9 of All India et I 15. Using marginal cost and marginal revenue approach, find out the level of output at which producer will be in equilibrium. Give reasons f your answer. (6) Output (Units) Average Revenue (`) Total Cost (`) (4) Ans. Cost and Revenue chedule of the firm Output (units) Average Revenue (`) Total Revenue (`) Marginal Revenue (`) Total Cost (`) Marginal Cost (`) Producer will be at equilibrium when the output is 5 units. F reasons refer to Q. No. 15 of elhi et I. ECTION B 20. What is fiscal deficit? Ans. Fiscal deficit is the difference between governments s total expenditure and total receipts, excluding browings. 28. Assuming that s increase in investment is ` 900 cre and marginal propensity to consume is 0.6, explain the wking of multiplier. (6) Ans. Increase in income = ` 2250 cres. olve. as Q. No. 30 of elhi et I

16 29. Calculate (a) Net National Product at Market Price and (b) Gross National isposable Income (6) ` in cres (i) Gross domestic fixed capital fmation 400 (ii) Private final consumption expenditure 8000 (iii) Government final consumption expenditure 3000 (iv) Change in stock 50 (v) Consumption of fixed capital 40 (vi) Net indirect taxes 100 (vii) Net expts ( ) 60 (viii) Net fact income to abroad ( ) 80 (ix) Net current transfers fm abroad 100 (x) ividend 100 Ans. (a) Gross omestic Product at Market Price (GP MP ) = Private Final Consumption Expenditure + Government Final Consumption Expenditure + Gross omestic Fixed Capital Fmation + Change in tock + Net Expts = ( 60) = `11390 Cres Net National Product at Market Price (NNP MP ) =GP MP Consumption of Fixed Capital Net Fact Income to Abroad = ( 80) = `11430 cres (4) (b) Gross National isposable Income = NNP MP + Net Current Transfers from Abroad + Consumption of Fixed Capital = = `11570 cres. (2)