All Question Answer

* Money supply exceed the supply goods a d services. * additional money creation due to budget deficit * rising price but not high in prices. * Devaluating the worth of money. * Reduce purchasing power of money. * Inflation Rate= {(Price in current year - price in previous year)/ Price in previous year} ×100 Deflation - Rise the value of money and purchasing power. Types of inflation-  A. On the basis of causes-  1. Currency inflation- caused by printing of currency notes. 2. Deficit induced inflation - when government expenditure exceeds revenue then to meet this gap, government may ask to the rbi for print the additional money to overcome the budget deficit. This may come price rise. 3. Demand pull inflation-  Rise in demand over available output may rise the price. Economy exceeds the available goods and services, DPI appears.   Coulborn - "Too much money chasing too few goods." 4. Cost push inflation- Overall increase in cost of production...

1. Product Method 2. Income Method 3.Expenditure Method 1. Product Method - Money value of All final Goods   & Service in current year. 2. Income Method -  measured the flow of factors incomes. Generally four factors- production labour, capital, land and entrepreneurship  In case of self employed person, their own labour and expenditure s. called mixed income. Sum of above all factors income is called NDP at factor cost. 3. Expenditure Method - Measured by flow of expenditure.

NNP at factor cost = NNP at market price - Indirect taxes + subsidies NNP at market price= GNP at market price - Depreciation Put the NNP at market price in first formula

NNP at market price= GNP at market price - Depreciation

NNP = GNP - Depriciation

GNP at market Price - Indirect Taxes + Subsidies

Average income genrated by population of current year. Per capita income= NNP/Population. {That Year}

National Income is value of goods and service expressed in terms of money at current year. Does not indicated real state of economy. Real Income= NNP current year × (Base year index 100/ Curremt year index)

Actual Income consumed by individuals and families. Disposable Income= Personal Income- Direct Taxes

Income received by any individual from any sources before direct taxes in one year. Exclude undistributed corporate profits. Personal Income=Private Imcome- Undistributed Corporate Profits- Profit Taxes

Generated income from any sources Private Income= National Income(or NNP at factor cost)+ Transfer payment+ Interest on public debt- social security- profits and surpluses of public undertaking

* Income generated within own country and by own resources *ex- salary, rent, interest, direct tax Domestic Income= National Income - Net Income earned from abroad.