Question

Calculate Domestic Income:

Items

Rs in crore

Compensation of employees

2000

Rent and interest

800

Indirect taxes

120

Corporation Tax

460

Consumption of fixed capital

100

Subsidies

20

Dividend

940

Undistributed profits

300

Net factor income to abroad

150

Mixed income

200

A 4000 Correct Answer Incorrect Answer
B 4700 Correct Answer Incorrect Answer
C 5000 Correct Answer Incorrect Answer
D 6000 Correct Answer Incorrect Answer
E 4900 Correct Answer Incorrect Answer

Solution

Profit=Dividend + Corporation Tax + Undistributed profits = 940 + 460 + 300 = 1700

Operating Surplus = Rent + Interest + Profit = 800 + 1700 = 2500

Domestic Income = NDP at fc = Compensation of employees + Mixed income + Operating Surplus

= 2000 + 200 + 2500 = 4700

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