NCERT Class 12 Economics Part 2 Chapter 2 National Income Accounting Extra Questions and Answers
Class 12 Economics Part 2 Chapter 2 Extra Inside Questions and Answers – National Income Accounting. Here in this Page Class XII Students can Learn Extra Questions & Answer 2nd Chapter Economics Part 2 fully Inside.
We Provided Here National Income Accounting Economics Part 2 Chapter 2 Long Answer Type Question, MCQ Questions & Answer, Short Answer Type Questions (2 or 3 marks), and Very Short answer Type Question (1 marks) Solution.
Class 12 Economics Part 2 Chapter 2 Inside based Question
Economics Part 2 Chapter 2 National Income Accounting Class 12 Inside 6 Marks, 3 marks, 2 Marks & And 1 Marks Important Questions and Answers.
1.) What is mean by final good?
Ans.
Thus a farmer producing cotton sells it to a spinning mill where the raw cotton undergoes transformation to yarn; the yarn is, in turn, sold to a textile mill where, through the productive process, it is transformed into cloth; the cloth is, in turn, transformed through another productive process into an article of clothing which is then ready to be sold finally to the consumers for final use. Such an item that is meant for final use and will not pass through any more stages of production or transformations is called a final good.Food, gasoline, clothing, and televisions are examples of final goods if used by households. final goods means those goods that do not require further processing.
2.) distinguish between consumption goods and capital goods.
Consumption goods | Capital goods |
Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called consumption goods or consumer goods. | Capital goods are those goods that have a future use and are used for production of consumption goods. |
This also includes services which are consumed but for convenience we may refer to them as consumer goods.) | we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods. |
Target market is consumers | Target market is manufactures |
Consumer goods are purchased and completed personal consumption needs | Capital goods are purchased for manufacturing of consumption goods. |
3.) What is mean by stock?
Ans -In contrast, capital goods or consumer durables once produced do not wearout or get consumed in a delineated time period. In fact capital goodscontinueto serve us through different cycles of production. The buildings or machines ina factory are there irrespective of the specific time period. There can be additionto, or deduction from, these if a new machine is added or a machine falls indisuse and is not replaced. These are called stocks. Stocks are defined at aparticular point of time.
4.) What is mean by depreciation.?
Ans -The already existing capital stock suffers wear and tear and needs maintenance and replacement. A part of the capital goods produced this year goes for replacement of existing capital goods and is not an addition to the stock of capital goods already existing and its value needs to be subtracted from gross investment for arriving at the measure for net investment. This deletion, which is made from the value of gross investment in order to accommodate regular wear and tear of capital,is called depreciation.
5.) what are the factors of production and there remuneration ?
Ans – i.) Human labour, remuneration for which is called wages.
ii.) Capital, remuneration for which is called interest .
iii. Entrepreneurship, remuneration of which is profit.
iv.Land, remuneration for which is called rent.
6.) What is mean by macroeconomics modal ?
Ans – A story which describes the functioning of an imaginaryeconomy is called a macroeconomic model.
7.) What is mean by value added ?
Ans -The term that is used to denote the net contribution made by a firm iscalled its value added.
8.) What is mean by gross value added and Net value added ?
Ans – If we include depreciation in value addedthen the measure of value added that we obtain is called Gross Value Added. Ifwe deduct the value of depreciation from gross value added we obtain Net ValueAdded.
9.) what is mean inventory ?
Ans – In economics, the stock of unsold finished goods, or semi-finished goods,or raw materials which a firm carries from one year to the next is calledinventory.
10.) What is mean by investment and there categories ?
Ans – Inventories are treated as capital. Addition to the stock of capital of a firmis known as investment. Therefore, change in the inventory of a firm is treatedas investment. There can be three major categories of investment. First is therise in the value of inventories of a firm over a year which is treated as investment expenditure undertaken by the firm. The second category of investment is the fixed business investment, which is defined as the addition to the machinery, factory buildings and equipment employed by the firms. The last category of investment is the residential investment, which refers to the addition of housing facilities.
11.) what is mean by unplanned accumulation of inventories and unplanned decumulation of inventories.
Ans -Change in inventories may be planned or unplanned. In case of anun expected fall in sales, the firm will have unsold stock of goods which it had not anticipated. Hence there will be unplanned accumulation of inventories. In the opposite case where there is unexpected rise in the sales there will be unplanned decumulation of inventories.
12.) which method we use to calculated the aggregate value of goods and services produced in an economy .
Ans – i.) The Product or Value Added Method
ii.) Expenditure Method
iii. Income Method
13.) What is mean by gross national product ?
Ans -The macroeconomic variable which takes into account such additions and subtractions is known as Gross National Product(GNP).
1.) What is mean by final good?
Ans.
Thus a farmer producing cotton sells it to a spinning mill where the raw cotton undergoes transformation to yarn; the yarn is, in turn, sold to a textile mill where, through the productive process, it is transformed into cloth; the cloth is, in turn, transformed through another productive process into an article of clothing which is then ready to be sold finally to the consumers for final use. Such an item that is meant for final use and will not pass through any more stages of production or transformations is called a final good.Food, gasoline, clothing, and televisions are examples of final goods if used by households. final goods means those goods that do not require further processing.
2.) distinguish between consumption goods and capital goods.
Consumption goods | Capital goods |
Goods like food and clothing, and services like recreation that are consumed when purchased by their ultimate consumers are called consumption goods or consumer goods. | Capital goods are those goods that have a future use and are used for production of consumption goods. |
This also includes services which are consumed but for convenience we may refer to them as consumer goods.) | we consider all the final goods and services produced in an economy in a given period of time they are either in the form of consumption goods (both durable and non-durable) or capital goods. |
Target market is consumers | Target market is manufactures |
Consumer goods are purchased and completed personal consumption needs | Capital goods are purchased for manufacturing of consumption goods. |
1.)What is mean by final good ?
Ans -A farmer producing cotton sells it to a spinning mill wherethe raw cottonundergoes transformation to yarn; the yarn is, in turn, sold to atextile millwhere, through the productive process, it is transformed into cloth;the cloth is, in turn, transformed through another productive process into anarticle of clothing which is then ready to be sold finally to the consumers forfinal use. Such an item that is meant for final use and will not pass through anymore stages of production or transformations is called a final good.
2.) What is mean by flow?
Ans -Income, or output, or profits are concepts that make senseonly when atime period is specified. These are called flows because they occurin a period of time. Therefore we need to delineate a time period to get aquantitative measure of these. Since a lot of accounting is done annually in aneconomy,many of these are expressed annually like annual profits or production.Flows are defined over a period of time.
3.) What is mean by stock?
Ans -In contrast, capital goods or consumer durables once produced do not wearout or get consumed in a delineated time period. In fact capital goodscontinueto serve us through different cycles of production. The buildings or machines ina factory are there irrespective of the specific time period. There can be additionto, or deduction from, these if a new machine is added or a machine falls indisuse and is not replaced. These are called stocks. Stocks are defined at aparticular point of time.
4.) What is mean by depreciation.?
Ans -The already existing capitalstock suffers wear and tear and needs maintenance and replacement. A partof the capital goods produced this year goes for replacement of existing capitalgoods and is not an addition to the stock of capital goods already existingand its value needs to be subtracted from gross investment for arriving at themeasure for net investment. This deletion, which is made from the value ofgross investment in order to accommodate regular wear and tear of capital,is called depreciation.
5.) what are the factors of production and there remuneration ?
Ans – i.) Human labour, remuneration for which is called wages.
ii.) Capital, remuneration for which is called interest .
iii.) Entrepreneurship, remuneration of which is profit.
iv.) Land, remuneration for which is called rent.
6.) What is mean by macroeconomics modal ?
Ans – A story which describes the functioning of an imaginaryeconomy is called a macroeconomic model.
7.) What is mean by value added ?
Ans -The term that is used to denote the net contribution made by a firm iscalled its value added.
8.) What is mean by gross value added and Net value added ?
Ans – If we include depreciation in value addedthen the measure of value added that we obtain is called Gross Value Added. Ifwe deduct the value of depreciation from gross value added we obtain Net ValueAdded.
9.) what is mean inventory ?
Ans – In economics, the stock of unsold finished goods, or semi-finished goods,or raw materials which a firm carries from one year to the next is calledinventory.
10.) What is mean by investment and there categories ?
Ans – Inventories are treated as capital. Addition to the stock of capital of a firmis known as investment. Therefore, change in the inventory of a firm is treatedas investment. There can be three major categories of investment. First is therise in the value of inventories of a firm over a year which is treated as investment expenditure undertaken by the firm. The second category of investment is the fixed business investment, which is defined as the addition to the machinery, factory buildings and equipment employed by the firms. The last category of investment is the residential investment, which refers to the addition of housing facilities.
11.) what is mean by unplanned accumulation of inventories and unplanned decumulation of inventories.
Ans -Change in inventories may be planned or unplanned. In case of anun expected fall in sales, the firm will have unsold stock of goods which it had not anticipated. Hence there will be unplanned accumulation of inventories. In the opposite case where there is unexpected rise in the sales there will be unplanned decumulation of inventories.
12.) which method we use to calculated the aggregate value of goods and services produced in an economy .
Ans – i.) The Product or Value Added Method
ii.) Expenditure Method
iii.) Income Method
13.) What is mean by gross national product ?
Ans -The macroeconomic variable which takes into account such additions and subtractions is known as Gross National Product(GNP).
14.) What is mean by final good ?
Ans -A farmer producing cotton sells it to a spinning mill where the raw cotton undergoes transformation to yarn; the yarn is, in turn, sold to a textile mill where, through the productive process, it is transformed into cloth; the cloth is, in turn, transformed through another productive process into an article of clothing which is then ready to be sold finally to the consumers for final use. Such an item that is meant for final use and will not pass through anymore stages of production or transformations is called a final good.
15.) What is mean by flow?
Ans -Income, or output, or profits are concepts that make sense only when at ime period is specified. These are called flows because they occur in a period of time. Therefore we need to delineate a time period to get a quantitative measure of these. Since a lot of accounting is done annually in aneconomy, many of these are expressed annually like annual profits or production. Flows are defined over a period of time.
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