Basic Concepts of Macroeconomics

State whether the following statement is true or false:

'Purchase of machinery by a producer is an intermediate good.'

State whether the following statement is true or false:

'Inventory is a stock variable.'

Define the problem of double-counting in the computation of national income. State any two approaches to correct the problem of double-counting. 

Distinguish between stock and variables with suitable exmples.

What are capital goods? How are they different from consumption goods?

Distinguish between final goods and intermediate goods. Give an example of each.

Suppose firm A sold raw material to firm B for $₹ 1,000$ and to firm C for $₹ 600$. Firm B sold its product partly to private consumers for $₹ 800$ and the remaining product was exported for $₹ 600$, Firm C part of its product to the government for$₹ 500$ for public consumption, and the remaining product worth $₹ 500$ was unsold stock left with it. (Assume that firm A buys no raw material).

(i) Find the value added by firm A firm B and firm C

 (ii) Total Consumption Expenditure

 Calculate Intermediate Consumption from the following data:

Define net exports. How is it different from net factor income from abroad? 

Giving reason identify whether the following are final expenditures or intermediate expenditure-

(i) Expenditure on maintenance of an office building.

(ii) Expenditure on improvement of a machine in a factory.

Define intermediate consumption.

Which of the following is an intermediate expenditure?

Define stocks.

Giving reason explain how should the following be treated in the estimation of national income:

Purchase of a refrigerator by a firm for its own use.

Give reasons to explain how the following should be treated in estimating gross domestic product at the market price?

Interest paid by an individual on a car loan taken from a bank.

Give reasons to explain how the following should be treated in estimating gross domestic product at the market?

Fees to a mechanic, paid by a firm.

The Government of India has recently launched 'Jan Dhan Yojana' aimed at every household in the country to have at least one bank account. Explain how deposits made under the plan are going to affect the national income of the country.

Classify the following as Final goods or Intermediate goods:

(i) Machine purchased by a firm.

(ii) Soft drinks purchased by the school canteen.

(iii) Clothes purchased by an individual.

(iv) Coal purchased by a factory.

(v) Electricity consumption in a business.

(vi) Book purchased by a student.

(vii) Books purchased by a bookseller.

(viii) Postage stamps purchased by a consumer.

(ix) Postage stamps purchased by a business unit.

(x) Exhaust fans used for making water coolers.

(xi) Seeds purchased by a farmer to produce wheat.

(xii) Seeds purchased for kitchen gardening.

(xiii) Machines purchased by a dealer of machines.

(xiv) Car purchased by a household.

(xv) Sewing machine purchased by a housewife.

 Distinguish between Intermediate product and final product, giving suitable examples in support of your answer?

Briefly discuss the meaning of domestic territory?