Macroeconomics numericals

National income is the total money value of goods and services produced by a country in a particular period of time.

Macroeconomics numericals

Determination of Break-even Point: Suppose the fixed cost of a factory in Rs.

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It means if the company makes the sales of 5, units, it would make neither loss nor profit. This can be seen in the analysis. Multi-product firms are not in a position to measure the break-even point in terms of any common unit of product.

They find it convenient to determine the break-even point in terms of total rupee sales. Here again the break-even point would be where the contribution margin sales value—variable costs would be equal to fixed costs. The contribution margin however, is expressed as a ratio to sales. The above paragraph explains a simple Macroeconomics numericals of break-even point which is based on cost and revenue i.

There are two other types of break-even and they are: An industry requires money for two purposes i. These requirements can be partly met by his own investment and partly by loans and advances from financial institutions.

Macroeconomics numericals

The industry requires term loans to acquire capital assets like land and building, plant and machinery. In the case of term loans, the financial institutions shall have to find out the probability of the applicant being able to meet the interest and loan repayment schedule. It will be more interested in knowing the level of break-even point where not only total costs are required but also the full debt service.

CBSE Class 12 Economics Notes NCERT Book Solutions

The level of break-even is called the cash break-even. It is based on revenue and cost data involving cash flows. The depreciation, investment allowance reserve and other provision of the cost items should be excluded but at the same time the repayment of installment should be added to fixed cost.

The various sources from which the industry is proposed to be financed such as the capital, long term borrowing, deferred payments and other sources. If these sources are inadequate the industry may approach the bank for under writing its shares.

Macroeconomics numericals

If the share market does not respond positively, the equity risk falls on the underwriter. As the share holder of the bank will expect a certain dividend just to cover the payment of interest for the term loans.Key Formulas in Macroeconomics.

GDP = C + I + G + Xn: The expenditure approach to measuring GDP; GDP = W + I + R + P: The income approach to measuring GDP; Calculating nominal GDP: The quantity of various goods produced in a nation times their current prices, added together.

Macroeconomics problems arise when the economy does not adequately achieve the goals of full employment, stability, and economic growth. As a result of which there is a . Pack 2 - Microeconomics.

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