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Value added is a Flow (Flow/Stock) variable. Explanation:- Value added is gross domestic product. It is measured over a period of time. for example, the gross domestic product of India is measured for a fiscal year that is 12 months.…
Higher production of Consumption (Capital/Consumption) goods promote welfare of people in the economy. Explanation:- As per economics, Higher is the consumption more is the welfare
Real GDP is better than Nominal GDP as it truly reflects the growth of an Economy. Explanation:- Real GDP is calculated at the base price. It changes when the quantity produced changes. If the Quantity produced is less, it decreases…
When GDP of a given year is estimated on the basis of price of the same year, it is called Nominal GDP or GDP at Current Price.
Profit = Corporate Tax + Dividend + Retained Earnings. Explanation:- Profit is in the income from entrepreneurship. First corporate tax is paid out of it. From the rest, the dividend to the shareholders. The rest is the retained earnings of…
Operating Surplus does not arise in the General Government sector as it works with the motive of social welfare. Explanation:- The general Government only works for the welfare of the people. The income from property and entrepreneurship does not arise…
Net Exports refers to difference between Exports and Imports of a country during a period of one year. Explanation:- Net Exports – Exports – Imports
Expenditure Method is also known as Income Disposal Method. Explanation:- In this phase, Income earned is fully expended on goods and services produced. Thus another name of the expenditure method is the income disposal method. The other alternative name of…
Mixed Income is the income generated by own-account workers. Explanation:- The Mixed income refers to the income generated by own account workers (like doctors, lawyers, farmers, barbers, etc.) and unincorporated enterprises (like retail traders, shopkeepers etc).
Environmental Pollution caused by industrial plants is an example of Negative Externality. Explanation:- Externalities refer to the benefits or harms of an activity caused by a firm or an individual for which they are not paid or penalized. Activities resulting…