What is the Concept of Green GNP ? In the recent years the economists have realized that the costs of producing GDP need to be incorporated in estimating GDP to find the actual welfare of the people. These real costs are of two types. First, in the production process firms pollutes the air and theContinue reading “What is the Concept of Green GNP ?”
Difficulties in the Measurement National Income – There are many difficulties in measuring national income of a country correctly. The difficulties are of two types in nature conceptual and statistical. Some of these difficulties/problems are – (1) Non-monetary Transactions – The first problem is related to the non-monetary transactions such as the services of theContinue reading “Difficulties in the Measurement National Income”
Income Method of Measuring National Income – Income method measures national income at the phases of distribution and appears as income paid and/or received by individuals of the country. In this method national income is obtained by adding up the incomes of all individuals of a country. Individuals earn incomes by contributing their own servicesContinue reading “Income Method of Measuring National Income”
GDPMP = Final Private Consumption Expenditure + Final Government Consumption Expenditure + Gross Domestic Capital Formation + Exports – Imports
GDPMP = C + G + I + (X – M)
After subtracting depreciation (consumption of fixed capital) from Gross Domestic Product at Market Prices (GDPMP) we get Net Domestic Product at Market Prices (NDPMP).
Value Added Method of Measuring National Income – Value Added Method is also called Output Method or Production Method. In this method, the economy is divided into different industrial sectors such as agriculture, mining, construction, communication, transport, manufacturing, trade and commerce and other services. Then the net value added at factor cost (NVAFC) by eachContinue reading “Value Added Method of Measuring National Income”
Fiscal Policy and Equitable Distribution of Income – Existence of inequalities is a social evil and no measure of economic development can increase welfare unless an equitable distribution of income or national product is assured. Taxation can be used to bring about a redistribution of income in favor of the poorer sections of the society.Continue reading “Fiscal Policy, Equitable Distribution of Income and Price Stability”
What is Public Finance ? According to Dalton, ‘Public finance is concerned with the income and expenditure of public authorities and with the adjustment of one to the other.’ According to Prof. Otto Eckstein, ‘Public finance is the study of the effects of budgets on the economy, particularly the effect on the achievement of theContinue reading “A Brief Introduction to Public Finance”
How Fiscal Deficit Affects Economic Growth ? Keynesian View – According to many Keynesian economists fiscal deficit promotes economic growth. In India, in the past some years as between 1997-2003, a good amount of industrial capacity was useless due to lack of aggregate demand, and there were enough stocks of foodgrains, it was asserted thatContinue reading “How Fiscal Deficit Affects Economic Growth ?”
What are the different types of Deficit ? Budget Deficit – A budget deficit occurs when an organization or government does not earns enough revenue to cover its expenditure. There are a number of types of budget deficits – like Revenue deficit, Fiscal deficit and Primary deficit. A budget deficit is not healthy for theContinue reading “What are the Different Types of Deficit ?”
What is Money Financing of Budget Deficit ? The government can finance it budget deficit by printing high powered money. The revenue raised through printing new money is also called Seigniorage. When government finances its budget deficit by printing new money, money supply in the economy increases which may cause inflation. According to the KeynesianContinue reading “What is Money Financing of Budget Deficit ?”
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