question_answer

Explain any two objectives of Government Budget.

Answer:

(i) Difference between intermediate goods and final goods are :

Basis	Intermediate Goods	Final Goods
Final use	These goods are not ready for use by their final users as they are still within the boundary line of production.	These goods are ready for use by final users as these goods have crossed the boundary line of production.
Value added	Value is yet to be added to those goods.	Value is not to be added to these goods.
Inclusion in national income	These goods are not included in estimation of national income.	These goods are included in the estimation of income.

            (ii) [a] Car purchased by a taxi-operator is a final good, as it is to be used by him as a fixed asset. [b] Pen purchased by a retail dealer for resale purpose is an intermediate good as value is yet to be added in it. [c] Milk purchased by a sweet-maker is intermediate good as it will be used as a raw material.  Or Income Method Net Domestic Product at Factor Cost\[(ND{{P}_{Fc}})\] = Compensation of Employees + Operating Surplus+ Mixed Income \[=4,000+(600+1,000+2,560)+0=Rs.\,\,8,160\,\,crore\] National Income\[(NN{{P}_{Fc}})=ND{{P}_{FC}}-\]Net Factor Income to Abroad\[\Rightarrow 8,160120=Rs.\text{ }8,040\]crores     Expenditure Method Gross Domestic Product at Market Price\[(GD{{P}_{MP}})\] = Private Final Consumption Expenditures ? Government Final Consumption Expenditure+Gross Domestic Capital Formation+Net Exports \[=4,800+2,400+(1,360+200)+(-160)=Rs.\,\,8.600\,\,crore\]                                        National Income\[(NN{{P}_{Fc}})=GD{{P}_{MP}}-\]Depreciation -Net Factor Income to Abroad ? Net Indirect Taxes \[=8,600-200-120-~240=Rs.\,\,8,040\,\,crore\]