Page 221 - DECO405_MANAGERIAL_ECONOMICS

Managerial Economics

Notes 8. What is the impact (if any) on the national income of India in each of the following cases?
(a) Shyam receives 5000 as a gift from his father who is also a resident of India.
(b) Aggregate inventories in Indian companies go down by 20,000.
(c) A receives 100 dollars as dividend from a company based in the USA.
(d) A sells shares and reaps capital gains worth 1,000.

Give reasons for your answers.
9. Calculate national income from the following figures (in crores):
Consumption 200
Depreciation 20

Retained earning 12
Gross investment 30
Import 40
Provident fund contributions 25
Exports 50

Indirect business taxes 15
Government purchases 60
Personal income taxes 40
(a) If there were 10 crores people in this country.
(b) If all prices were to double overnight, what would happen to the value of real and
nominal GDP per capita?
10. Discuss the National Income identities with reference to India.

Answers: Self Assessment

1. (a) ii (b) iv (c) iii
2. (a) True (b) False (c) False (d) False

(e) True
3. (a) alternative (b) capital goods (c) Factors of production
(d) depreciation (e) disposable income
(f) consumption, savings (g) taxes.

13.7 Further Readings

Books Bibek Debroy, Managerial Economics, Global Business Press, Delhi.
Dr. Atmanand, Managerial Economics, Excel Books, Delhi.
H.L. Ahuja, Macroeconomics Theory and Policy, S. Chand Publication.
Shapiro, Bensen, The Psychology of Pricing, Harvard Business Review.

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