Define consumption goods and what are its categories. 9. 15. 7. Power Points and Revision Window offer a quick glance of the subject matter. Ans:Â Transfers made from the current income of the payer and added to the current income of the recipient (who receive) for consumption expenditure are called current transfers. Ans:Â Stock concept (d) All of these. Reason:Â It is received without rendering any productive services. Imports Ans:Â Excluded 3. Reason:Â It relates to a point of time. Blocks in each chapter include matter of special significance. purchased by a school are intermediate goods as these are used up in the process of value â addition during the year. Ans:Â True:Â Even in case of closed economy, circular flow of income takes place between households and firms. Ans:Â Â Intermediate product Claim received from Insurance company by an injured worker. 13. Reason:Â As it is within the domestic territory of our country. If a car purchased by a taxi driver as a taxi or if purchased by a firm for use in its business is a capital good. This will be deemed as investment expenditure because furniture is used by the school for several years and is of high value. 2. 4. Reason:Â As their centre of economic interest lies in the home country. Reliance Industries rented its building to Microsoft in America. Reason:Â It is a final product as it is used by households for final consumption. Define âcapital goodsâ. Reason:Â It is related to a point of time. 3. Â If a sewing machine is purchased by a tailor, then it is a fixed asset of the tailor and considered to be a capital good. Question 3. The money value of domestic product is termed as Domestic Income. Microsoft Office in India 4. [CBSE Delhi 2011] 24. The government sector engaged in activities like taxation and subsidies. 21. As we know Domestic Product includes goods and services produced by production units located in the domestic territory (irrespective of fact whether carried out by residents or non-residents). (c) Free Play of market forces of demand and supply. [CBSE Foreign 2011] 12. Ans:Â (b), 1. Reason:Â Wealth is stock because it is measured at a point of time. Reason:Â As fertilizer is used for further production during the same year. Company in India owned by an American 8. Ans:Â Capital goods February 28, 2020 by CoolGyan Leave a Comment, 2. When it is purchased by a household, it is a consumer good. NCERT Solutions for Class 12 Macro Economics Chapter-1 Introduction to Macroeconomics and its Concepts NCERT TEXTBOOK QUESTIONS SOLVED 1. Reason:Â It is related to a period of time. Expenditure on maintenance by a firm. Ans:Â Consumer goods Sugar used by a sweet shop. Reason:Â It is a final product because it is purchased for investment. 5. Reason:Â As their centre of economic interest lies in the home country. Reason:Â As it is outside the domestic territory of our country. Ans:Â An Indian working in Indian Embassy in the USA will be treated as normal resident of India. Ans:Â False:Â Books used in a library are final goods as these are used by the end user. Ans:Â (d), 3. Construction of a house Or Reason:Â It relates to a particular point of time. 16. Ans:Â (a), 2. Ans:Â Â Normal Resident Money flow is known by the name of nominal flow. [CBSE Delhi 2011] [3-4 Marks] Expenditure on maintenance of an office building. A car purchased by a household. For example, machine purchased by a machine dealer. Coal used by consumer households. Ans:Â Non-durable Value: Implement of Knowledge. 10. Printer purchased by a lawyer. 6. 2. Unsold coal with trader at a year end. Reason:Â It relates to a period of time. Services of a private doctor purchased by a consumer household. 6. 12. Ans:Â Intermediate product Ans:Â Intermediate good Milk used by a manufacturer of sweets. Ans:Â (d), 5. Who is considered as agents of factor Use of raw material is a consumption good. [CBSE Sample Paper 2010] Ans:Â Production Phase, Distribution Phase and Disposition Phase. Ans:Â These are those which are used for: 9. Ans:Â Final Product Reason:Â End user is consumer. Ans:Â Transfer income Similarly, planes operated by Air India between Russia and Japan are part of the domestic territory of India. 1. But in national income accounting, the term domestic territory is used in a wider sense. Paper purchased by a publisher. 16. [CBSE (AI) 2010] (c) Disposition (d) All of them Between net investment and capital which is a stock and which is a flow? Indians going to Pakistan for watching the cricket match. 11. purchased by a school. NCERT Solutions for Class 12 Macro Economics Chapter-1 Introduction to Macroeconomics and its Concepts, I. Circular flow of income takes place in case of open economy and close economy. B. Birthday gift received from a friend. Reason:Â Saving is flow because it is .measured during a period of time. 2. Machinery of a firm Reason:Â Expenditure on maintenance of an office building is an intermediate expenditure as the things purchased for repair and maintenance are used up during the period of one year. Each chapter is divided into several sections corresponding to different components of the syllabus. Distinguish between consumption goods and capital goods. Budget Expenditure Ans:Â False:Â Real flow is known as physical flow. Ans:Â Intermediate product These goods require repair or replacement over time as their value depreciate over a period of time. Ans:Â Flow concept 8. If a machine is purchased by a household, then it is a final good. Purchase of pulses by a consumer. Reason:Â It relates to a period of time. (c) As compensation to employees. 7. Transfer income is a part of factor income. Explain. Refrigerator National Product includes production activities of normal residents irrespective of fact whether performed within the economic territoiy or outside it. Ans:Â No, it is not necessary that machine purchased is a capital good. 2. 6. Ans:Â These are those, which are used for: 10. Improvement of a machine implies improvement of asset value (through investment expenditure). Furniture purchased by a school. Â Government looks after growth, stability and social justice in the economy. Company Accounts and Analysis of Financial Statements, Part A â Fundamentals of Human Geography, PART-2 Politics in India since Independence, PART-B Politics in India since Independence, Class 12 NCERT Solutions Macro Economics Chapter-1 Introduction to Macroeconomics and its Concepts – Free PDF Download. Ans:Â. 4. Reason:Â End user is consumer. (a) Without any exchange of goods and services. Machines purchased by a dealer of machines. The concept of Normal Resident helps to estimate âNational Productâ. Reason:Â Machines purchased by a dealer of machines is an intermediate good because machines are resold by the firms to make profits or value is yet to be added to these goods by way of further processing. For example, Indian Embassy in Russia is a part of the domestic territory of India. The current edition has certain unique features: Each chapter starts with a To Do list. Ans:Â False:Â It depends on the use of bread. If it is purchased by a restaurant, it is a producer intermediate goods. Reason:Â It is a final product because it is purchased for investment. An Indian Company in America Ans:Â Consumption goods are those goods which satisfy the wants of consumers directly. 17. Reason:Â It is earned by rendering productive services. Ans:Â Stock concept APPLICATION BASED QUESTIONS Capital goods are defined as all goods produced for use in future productive processes. Give reasons for your answer. (d) All of these Ans:Â Service Bonus received on Diwali. Ans:Â Â Intermediate goods Branch of Punjab National Bank in America Ans:Â Flow concept Give the meaning of factor income. Saving [CBSE 2013] (d) Can be Consumption goods and intermediate goods Rest of the world sector engaged in exports and imports. Ships and air crafts owned and operated by normal residents between two or more countries. 7. Reason:Â These are intermediate products because these are purchased for resale. Ans:Â Included Ans:Â Consumer goods For example, Fishing boats operated by Indian fishermen in international waters of Indian Ocean will be considered a part of domestic territory of India. 22. Ans:Â Semi-durable 11. Ans:Â (a), 6. Ans:Â Final Product Ans:Â Not a Normal Resident VIII. Reason:Â As it is outside the domestic territory of our country. Reason:Â As it has expected life time of several years and of relatively high value.
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