Numerical Lab

Your instruction plan marks some lectures APPLY rather than UNDERSTAND — National Income measurement (Lecture 7), IS-LM (Lectures 9–10), and in the final portion the Phillips curve, the liquidity trap and Unit 5 — and course outcome PSO2 asks you to calculate a bank's lending capacity. Those are where numbers can be asked. Everything below is worked step by step in the textbook's own style.

Formula sheet

Memorise these first. Almost every numerical in this portion is one of them, rearranged.

National income

GDP_MP = C + I + G + (X − M) ← expenditure method GDP_MP = Σ Gross Value Added of all firms ← value-added method NDP_FC = Compensation of employees + Rent + Interest + Profit + Mixed income ← income method GNP_MP = GDP_MP + Net Factor Income from Abroad (NFIA) NNP_MP = GNP_MP − Depreciation NNP_FC = NNP_MP − Net Indirect Taxes (= National Income) Net Indirect Taxes = Indirect Taxes − Subsidies Gross Value Added = Value of Output − Intermediate Consumption Value of Output = Sales + Change in Stock

Down the chain: NI → PI → PDI

Personal Income (PI) = National Income − Corporate (undistributed) profits − Corporate profit tax − Social security contributions + Transfer payments Personal Disposable Income (PDI) = PI − Personal (direct) taxes PDI = C + S

Real vs nominal

Nominal GNP GNP Deflator = ───────────────────── × 100 Real GNP Nominal GNP Real GNP = ───────────────────── × 100 GNP Deflator

Consumption, saving, multiplier

C = a + bY a = autonomous consumption, b = MPC S = Y − C = −a + (1 − b)Y APC = C / Y MPC = ΔC / ΔY APS = S / Y MPS = ΔS / ΔY APC + APS = 1 MPC + MPS = 1 Break-even income: Y = C ⟹ Y* = a / (1 − b) 1 1 Multiplier k = ───────── = ───── ΔY = k × ΔI 1 − MPC MPS

Units 3–5: inflation, money, budget

P_t − P_t−1 Inflation rate π = ─────────── × 100 P_t−1 Fisher: nominal interest i = real interest r + expected inflation π^e real interest ≈ nominal interest − inflation Deposit (credit) multiplier = 1 / r r = cash reserve ratio Total deposits = initial deposit × 1 / r Credit created = total deposits − initial deposit High-powered money H = Cp + R Money supply M = Cp + D 1 + k Money multiplier m = ─────── k = Cp / D, r = R / D M = m × H r + k Budget constraint G − T = ΔB + ΔM Revenue deficit = revenue expenditure − revenue receipts Fiscal deficit = total expenditure − (revenue receipts + non-debt capital receipts) Primary deficit = fiscal deficit − interest payments

Problem 1 — Value added method TB

Ahuja, Ch. 2, Questions for Review Q.29 — p. 52

Question

An economy consists of only two firms, A and B. From the data below find (a) the value added by Firms A and B, and (b) gross domestic product at market prices.

Item	₹ crore
(i) Exports by Firm A	40
(ii) Imports by Firm A	100
(iii) Sales to households by Firm A	180
(iv) Sales to Firm B by Firm A	80
(v) Sales to Firm A by Firm B	60
(vi) Sales to households by Firm B	120

Textbook hint: exports by Firm A are part of its value of output; imports by Firm A are part of its intermediate cost of production.

Solution

Step 1 — Value of output of each firm. Output is everything the firm sold, to whomever it sold it.

Firm A output = 180 (to households) + 80 (to Firm B) + 40 (exports) = 300 Firm B output = 120 (to households) + 60 (to Firm A) = 180

Step 2 — Intermediate consumption of each firm. These are purchases of goods used up in production — from the other firm, and from abroad.

Firm A intermediate = 60 (bought from Firm B) + 100 (imports) = 160 Firm B intermediate = 80 (bought from Firm A) = 80

Step 3 — Gross value added = output − intermediate consumption.

GVA of Firm A = 300 − 160 = 140 GVA of Firm B = 180 − 80 = 100

Step 4 — GDP at market prices = sum of gross value added.

GDP_MP = 140 + 100 = ₹ 240 crore

This matches the answer printed in the textbook: GDP_MP = ₹ 240 crore.

⚠ Where marks are lost here

Adding all six figures together (180+80+40+120+60 = 480). That is double counting — Firm A's sales to Firm B are already inside Firm B's output.
Forgetting imports. Imports are not produced domestically, so they must be subtracted as intermediate cost, not added.
Forgetting that exports still count as domestic output. Something made in the country counts in GDP no matter who buys it.

Problem 2 — Income and expenditure methods TB

Ahuja, Ch. 2, Questions for Review Q.30 — p. 52

Question

From the following data calculate Gross National Product and Net National Product at market prices by (i) the income method and (ii) the expenditure method.

Item	₹ crore
(i) Mixed income of the self-employed	400
(ii) Compensation to employees	500
(iii) Private final consumption expenditure	900
(iv) Net factor income from abroad	(−) 20
(v) Net taxes	100
(vi) Consumption of fixed capital (depreciation)	120
(vii) Net domestic capital formation	280
(viii) Net exports	(−) 30
(ix) Profits	350
(x) Rent	100
(xi) Government final consumption expenditure	300

Solution — (ii) Expenditure method (do this one first: it is fully determined)

Step 1 — Build gross domestic capital formation. The data gives the net figure, so add back depreciation.

Gross domestic capital formation = Net domestic capital formation + Depreciation = 280 + 120 = 400

Step 2 — Add the four expenditure components.

GDP_MP = Private final consumption (C) + Government final consumption (G) + Gross domestic capital formation (I) + Net exports (X − M) = 900 + 300 + 400 + (−30) = ₹ 1,570 crore

Step 3 — Move from domestic to national, then from gross to net.

GNP_MP = GDP_MP + NFIA = 1570 + (−20) = ₹ 1,550 crore NNP_MP = GNP_MP − Depreciation = 1550 − 120 = ₹ 1,430 crore

Solution — (i) Income method

Step 1 — Add the factor incomes. This gives net domestic product at factor cost.

NDP_FC = Compensation to employees + Rent + Profits + Mixed income = 500 + 100 + 350 + 400 = ₹ 1,350 crore

Step 2 — Factor cost → market prices. Add net indirect taxes.

NDP_MP = NDP_FC + Net indirect taxes = 1350 + 100 = ₹ 1,450 crore

Step 3 — Net → gross, domestic → national.

GDP_MP = NDP_MP + Depreciation = 1450 + 120 = ₹ 1,570 crore ✓ matches GNP_MP = GDP_MP + NFIA = 1570 − 20 = ₹ 1,550 crore NNP_MP = GNP_MP − Depreciation = 1550 − 120 = ₹ 1,430 crore

Both methods give the same GNP and NNP — which is the whole point of the three-fold identity National Income = National Product = National Expenditure.

⚠ A note on item (v), and on this type of question generally

The printed question labels item (v) as "net direct taxes". Read literally, direct taxes are not added anywhere in the income method — direct taxes are paid out of factor incomes that are already counted — and the income method would then stop at NNP_FC = ₹ 1,330 crore, which would not reconcile with the expenditure method's ₹ 1,430 crore. The two methods agree only if item (v) is treated as net indirect taxes, which is what the ₹ 100 crore is doing arithmetically. The solution above therefore reads it that way; the discrepancy is in the printed wording, not in your method.

Rule to carry into the exam: only net indirect taxes bridge factor cost and market prices. Direct taxes, transfer payments, and receipts from second-hand sales never enter national income at all.

Problem 3 — Down the chain: GDP_MP to PDI Illustrative

Invented figures; the chain of concepts is the textbook's (Ahuja, Ch. 2, pp. 33–37). This is the single most reliable way to be asked about the whole family of national-income aggregates at once.

Question

Item	₹ crore
Gross Domestic Product at market prices	5,000
Net factor income from abroad	(−) 50
Depreciation	400
Indirect taxes	600
Subsidies	150
Undistributed corporate profits	200
Corporate profit tax	120
Social security contributions by employees	80
Transfer payments to households	250
Personal (direct) taxes	300

Find GNP_MP, NNP_MP, National Income (NNP_FC), Personal Income and Personal Disposable Income.

Solution — work strictly downward, one deduction at a time

GDP_MP 5,000 + Net factor income from abroad − 50 GNP_MP 4,950 − Depreciation − 400 NNP_MP 4,550 − Net indirect taxes (600 − 150 = 450) − 450 NNP_FC = NATIONAL INCOME 4,100 − Undistributed corporate profits − 200 − Corporate profit tax − 120 − Social security contributions − 80 + Transfer payments + 250 PERSONAL INCOME 3,950 − Personal (direct) taxes − 300 PERSONAL DISPOSABLE INCOME 3,650

Whatever is left — ₹ 3,650 crore — is what households can actually do something with, and it splits exactly into consumption and saving: PDI = C + S.

⚠ Where marks are lost here

Subtracting indirect taxes instead of net indirect taxes. Subsidies must be netted off first (600 − 150 = 450).
Getting the sign of NFIA wrong. NFIA is added to GDP to reach GNP, even when it is negative.
Adding transfer payments to National Income. Transfers are not payment for any productive service, so they are excluded from NI — but they are income to a household, so they come back in at the Personal Income step.
Deducting personal taxes before Personal Income. Corporate taxes are deducted at the NI → PI step; personal taxes are deducted at the PI → PDI step.

Problem 4 — Nominal GNP, real GNP and the deflator Illustrative

Question

An economy's nominal GNP is ₹ 8,400 crore in 2024–25. The GNP deflator for that year, taking 2011–12 as base (= 100), is 175. Find real GNP. If nominal GNP rises by 12% the next year while real GNP rises by 5%, what happens to the deflator?

Solution

Nominal GNP 8,400 Real GNP = ───────────────── × 100 = ─────── × 100 = ₹ 4,800 crore Deflator 175

Next year. Scale each series by its own growth rate, then re-take the ratio.

Nominal GNP = 8,400 × 1.12 = 9,408 Real GNP = 4,800 × 1.05 = 5,040 9,408 Deflator = ─────────── × 100 = 186.67 5,040

The deflator rose from 175 to 186.67 — an increase of about 6.7%, which is the inflation rate for the year. Note the shortcut: nominal growth (12%) ≈ real growth (5%) + inflation (≈7%). Prices, not extra output, account for more than half of the money-value increase.

Problem 5 — Completing a consumption–saving schedule TB

Ahuja, Ch. 6, Questions for Review Q.12 — p. 169

Question

Given disposable income (Y_d) and consumption at the initial level of income (₹ 100), and assuming the marginal propensity to consume is 50 per cent, complete the table and draw the graphs of the consumption and saving functions.

Y_d	C	S	APC	MPC	APS	MPS
100	150	?	?	?	?	?
200	?	?	?	?	?	?
300	?	?	?	?	?	?
400	?	?	?	?	?	?
500	?	?	?	?	?	?
600	?	?	?	?	?	?

Solution

Step 1 — Write the consumption function. MPC = 0.5, so C = a + 0.5Y. Substitute the one point you are given, Y = 100 and C = 150:

150 = a + 0.5(100) ⟹ 150 = a + 50 ⟹ a = 100 C = 100 + 0.5Y and so S = Y − C = −100 + 0.5Y

Step 2 — Fill the table. Each row is C from the function, S = Y − C, then the four ratios.

Y_d	C	S	APC = C/Y	MPC = ΔC/ΔY	APS = S/Y	MPS = ΔS/ΔY
100	150	−50	1.50	—	−0.50	—
200	200	0	1.00	0.5	0.00	0.5
300	250	50	0.833	0.5	0.167	0.5
400	300	100	0.750	0.5	0.250	0.5
500	350	150	0.700	0.5	0.300	0.5
600	400	200	0.667	0.5	0.333	0.5

Step 3 — Read the three things the examiner wants you to notice.

APC falls (1.50 → 0.667) while MPC stays constant at 0.5. That is exactly the property the textbook's Fig. 6.3 illustrates.
APC + APS = 1 and MPC + MPS = 1 in every single row. Check one: at Y = 300, 0.833 + 0.167 = 1. ✓
At Y = 200, C = Y and S = 0. This is the break-even level of income. Below it the economy dissaves (S is negative); above it, it saves.

Confirm the break-even algebraically: Y* = a / (1 − b) = 100 / (1 − 0.5) = 200. ✓

Step 4 — The graph (what to draw)

Two panels, stacked, sharing the same income axis — exactly the pair of figures on p. 151 and p. 156:

Upper panel: the 45° line from the origin, and the consumption line C = 100 + 0.5Y starting at an intercept of 100 on the vertical axis. They cross at Y = 200. Label the gap above the 45° line (Y < 200) as dissaving and the gap below it (Y > 200) as saving.
Lower panel: the saving line S = −100 + 0.5Y, starting at −100 and cutting the income axis at Y = 200. The vertical distance of this line from the axis at any income equals the C–45° gap directly above it.

Both diagrams are reproduced on Unit 2 — Consumption Function and Saving Function.

Problem 6 — The textbook's own schedule TB

Ahuja, Ch. 6, p. 152 (Table 6.1, described in the text) and p. 153 (Table 6.2)

Question — linear case

The textbook's discussion of Table 6.1 states that at an income of ₹ 1,000 crore consumption is ₹ 950 crore (APC = 0.95), and that when income rises to ₹ 1,200 crore consumption rises to ₹ 1,090 crore (APC = 0.908), with MPC constant throughout. Find the consumption function, then tabulate C, S, APC and APS from ₹ 1,000 crore to ₹ 1,500 crore in steps of ₹ 100 crore.

Solution

Step 1 — MPC from the two given points.

ΔC 1090 − 950 140 MPC = ──── = ───────────── = ───── = 0.7 ΔY 1200 − 1000 200

Step 2 — Autonomous consumption.

950 = a + 0.7(1000) ⟹ a = 950 − 700 = 250 C = 250 + 0.7Y S = −250 + 0.3Y

Step 3 — The schedule. (The two anchor rows in bold are the textbook's; the remaining rows follow from the same linear function.)

Y	C	S	APC	APS	MPC	MPS
1,000	950	50	0.950	0.050	—	—
1,100	1,020	80	0.927	0.073	0.7	0.3
1,200	1,090	110	0.908	0.092	0.7	0.3
1,300	1,160	140	0.892	0.108	0.7	0.3
1,400	1,230	170	0.879	0.121	0.7	0.3
1,500	1,300	200	0.867	0.133	0.7	0.3

APC falls steadily; MPC does not move. The break-even income here is Y* = 250 / 0.3 = ₹ 833.3 crore — below the whole range shown, which is why every row saves.

Question — non-linear case (Table 6.2, p. 153)

The textbook also gives a schedule where MPC itself falls. Reproduced here as printed:

Y (₹ crore)	C (₹ crore)	APC = C/Y	MPC = ΔC/ΔY
1,000	950	0.950	—
1,100	1,040	0.945	90/100 = 0.9
1,200	1,120	0.933	80/100 = 0.8
1,300	1,190	0.915	70/100 = 0.7
1,400	1,250	0.893	60/100 = 0.6
1,500	1,300	0.866	50/100 = 0.5

What to say about it: when both APC and MPC decline, the consumption function is no longer a straight line — it is concave to the income axis, as in the textbook's Fig. 6.4. Compare this with the linear case above, where only APC declined.

Problem 7 — The investment multiplier Illustrative

The multiplier is the quantity that fixes the slope of the IS curve — see Unit 2 — IS-LM, textbook Ch. 12 pp. 299–303.

Question

In an economy the consumption function is C = 200 + 0.75Y (₹ crore). Autonomous investment is ₹ 400 crore. (a) Find the multiplier. (b) Find equilibrium income. (c) If investment rises by ₹ 100 crore, by how much does income rise? (d) What would happen to your answer to (c) if MPC were 0.6 instead?

Solution

(a) Multiplier.

1 1 1 k = ───────── = ───────── = ───── = 4 1 − MPC 1 − 0.75 0.25

(b) Equilibrium income. Income is at equilibrium where Y = C + I.

Y = 200 + 0.75Y + 400 Y − 0.75Y = 600 0.25Y = 600 Y = ₹ 2,400 crore

Or, faster, using the multiplier on total autonomous spending: Y = k × (a + I) = 4 × (200 + 400) = 2,400. ✓

(c) Effect of ΔI = 100.

ΔY = k × ΔI = 4 × 100 = ₹ 400 crore (new equilibrium income = ₹ 2,800 crore)

(d) With MPC = 0.6.

k = 1 / (1 − 0.6) = 2.5 ⟹ ΔY = 2.5 × 100 = ₹ 250 crore

The point of part (d): a lower MPC means a bigger leakage into saving at every round, so the multiplier is smaller and the same injection produces less income. This is precisely why a higher MPC makes the IS curve flatter and fiscal policy more powerful.

⚠ Where marks are lost here

Using 1/MPC instead of 1/(1 − MPC). The multiplier is the reciprocal of the leakage, not of the spending share.
Reporting ΔY as the new income level rather than the change. Read the question: "by how much does income rise" wants 400, not 2,800.
Forgetting that autonomous consumption a is also multiplied when you compute the level of Y — only the change in I is multiplied when you compute ΔY.

Problem 8 — Credit creation and the deposit multiplier TB

The textbook's own example, Ahuja Ch. 18 pp. 416–417 — and the skill your course outcome PSO2 names: calculate the lending capacity of a bank given its deposits and a required reserve ratio Policy p. 5.

Question

A cash deposit of ₹1,00,000 is made in Bank A. The cash reserve ratio is 20%, and borrowers redeposit every loan in the banking system. (a) How much can Bank A lend? (b) Trace the first four rounds. (c) Find total deposits and the credit created by the banking system. (d) What happens if the RBI raises the CRR to 25%? (e) …or cuts it to 10%?

Solution

(a) Bank A's lending capacity = deposit − required reserve = 1,00,000 − (20% × 1,00,000) = ₹80,000.

(b) The rounds.

Bank	Deposit	Reserve (20%)	Loan
A	1,00,000	20,000	80,000
B	80,000	16,000	64,000
C	64,000	12,800	51,200
D	51,200	10,240	40,960

(c) Totals.

Deposit multiplier = 1 / r = 1 / 0.20 = 5 Total deposits = 5 × 1,00,000 = ₹5,00,000 Total reserves = 20% × 5,00,000 = ₹1,00,000 (= the original cash, as it must be) Credit created = 5,00,000 − 1,00,000 = ₹4,00,000

(d) CRR 25%: multiplier = 1/0.25 = 4 → total deposits ₹4,00,000, credit created ₹3,00,000 — credit contracts.

(e) CRR 10%: multiplier = 1/0.10 = 10 → total deposits ₹10,00,000, credit created ₹9,00,000 — credit expands. This is exactly why changing the CRR is a quantitative instrument of credit control.

⚠ Where marks are lost here

Giving total deposits when asked for credit created — subtract the original deposit.
Forgetting the assumption: 1/r holds only if there is no cash leakage. If borrowers keep some cash, the multiplier is smaller (Problem 9).

Problem 9 — The money multiplier with a currency drain Illustrative

Formula from Ahuja Ch. 20 pp. 459–460 — see Unit 4 · Supply of Money.

Question

High-powered money H = ₹1,000 crore. The public's currency–deposit ratio k = 0.25 and the banks' reserve ratio r = 0.10. Find (a) the money multiplier, (b) money supply, (c) currency with the public and demand deposits. (d) What happens to money supply if the RBI raises r to 0.15?

Solution

(a) m = (1 + k) / (r + k) = (1 + 0.25) / (0.10 + 0.25) = 1.25 / 0.35 = 3.57 (b) M = m × H = 3.57 × 1,000 = ₹3,571 crore (c) M = Cp + D = kD + D = 1.25 D ⟹ D = 3,571 / 1.25 = ₹2,857 crore Cp = 0.25 × 2,857 = ₹714 crore check: R = 0.10 × 2,857 = 286; Cp + R = 1,000 = H ✓ (d) m = 1.25 / (0.15 + 0.25) = 3.125 ⟹ M = ₹3,125 crore (falls by ₹446 crore)

Compare with Problem 8: with r = 0.10 and no currency drain the deposit multiplier would be 10; the public's habit of holding a quarter of its money as cash cuts the effective multiplier to 3.57. That is Benham's second limit on credit creation, in numbers.

Problem 10 — Inflation rate and real interest (Fisher effect) TB

Examples from Ahuja Ch. 26 p. 565 and the inflation-rate formula p. 577 — see Unit 3 · Effects of Inflation.

Question

(a) The CPI was 200 last year and 220 this year. What is the inflation rate? (b) You deposit ₹100 at 5% interest while inflation is 12%. What is your real return? (c) A lender wants a 10% real return and expects 8% inflation. What nominal rate should she charge on a loan of ₹10,000, and how much will she receive back?

Solution

(a) π = (220 − 200) / 200 × 100 = 10% (b) real return ≈ 5% − 12% = −7% the ₹105 received buys less than ₹100 did a year ago (c) nominal i = real r + expected π = 10% + 8% = 18% ⟹ repayment = 10,000 × 1.18 = ₹11,800

The point: if inflation is anticipated, the lender protects herself by charging 18% (the Fisher effect). If it is unanticipated and she charged only 10%, inflation of 8% would leave her a real return of about 2% — which is how unexpected inflation transfers wealth from creditors to debtors.

Problem 11 — Budget constraint and deficits Illustrative

Concepts from Ahuja Ch. 33A p. 694 and its appendix p. 701 — see Unit 5 · Budget Constraint.

Question

A government's budget (₹ crore): revenue receipts 1,800 (taxes and non-tax revenue); revenue expenditure 2,100, of which interest payments 400; capital expenditure 600; non-debt capital receipts (recovery of loans, disinvestment) 100. Find (a) revenue deficit, (b) fiscal deficit, (c) primary deficit. (d) If ₹500 crore of the fiscal deficit is met by selling bonds, how much is money-financed? What are the risks of each method?

Solution

(a) Revenue deficit = 2,100 − 1,800 = ₹300 crore (b) Total expenditure = 2,100 + 600 = 2,700 Fiscal deficit = 2,700 − (1,800 + 100) = ₹800 crore (c) Primary deficit = 800 − 400 = ₹400 crore (d) Take T = all non-debt receipts = 1,800 + 100 = 1,900, so G − T = 2,700 − 1,900 = 800 G − T = ΔB + ΔM ⟹ 800 = 500 + ΔM ⟹ ΔM = ₹300 crore of printed money

Interpretation: the revenue deficit shows ₹300 crore of borrowing is being used for consumption-type spending (government dissaving). The ₹500 crore of bonds raises interest rates and may crowd out private investment; the ₹300 crore of new money raises money supply and, near full employment, risks inflation — the "inflation tax". Half the fiscal deficit is just interest on past debt, which is why the primary deficit is watched too.

Practice set — try these unaided

No solutions given — the method for each is worked above

An economy has three firms. Firm X sells ₹ 500 to households and ₹ 200 to Firm Y; Firm Y sells ₹ 400 to households and ₹ 100 to Firm Z; Firm Z sells ₹ 300 to households. Firm X imports ₹ 150. Find each firm's value added and GDP_MP. (method: Problem 1)
Given GNP_MP = ₹ 6,200 crore, depreciation ₹ 500 crore, indirect taxes ₹ 700 crore, subsidies ₹ 200 crore, undistributed profits ₹ 150 crore, corporate tax ₹ 100 crore, transfer payments ₹ 300 crore and personal taxes ₹ 400 crore, find National Income, Personal Income and PDI. (method: Problem 3)
Nominal GNP is ₹ 12,000 crore and real GNP is ₹ 8,000 crore. Find the GNP deflator, and state the inflation since the base year. (method: Problem 4)
C = 60 + 0.8Y. Find (a) the saving function, (b) the break-even income, (c) APC and APS at Y = 500, and (d) verify APC + APS = 1. (method: Problem 5)
At Y = 400, C = 380; at Y = 600, C = 520. Find MPC, MPS, the consumption function, the saving function and the multiplier. (methods: Problems 6 and 7)
An economy with MPC = 0.8 wants to raise national income by ₹ 1,000 crore. By how much must autonomous investment increase? (method: Problem 7, rearranged)
A primary deposit of ₹50,000 is made and the CRR is 8%. Find the maximum total deposits and the credit created. What CRR would limit total deposits to ₹2,50,000? (method: Problem 8)
H = ₹2,000 crore, k = 0.2, r = 0.05. Find the money multiplier and money supply. By how much does M change if k rises to 0.3? (method: Problem 9)
The WPI rises from 150 to 162. Find the inflation rate. If a bank pays 6% on fixed deposits, what is the real return? (method: Problem 10)
G = ₹3,000 crore, T = ₹2,400 crore, market borrowing ₹450 crore. How much is money-financed? Which of the two financing methods risks crowding out, and which risks inflation? (method: Problem 11)

Exam habits that save marks in every numerical

Write the formula before the numbers. Method marks are usually awarded separately from the final answer.
Carry units. "₹ 1,570 crore", not "1570".
Cross-check by the second method whenever both are computable — as in Problem 2, agreement between income and expenditure methods is itself worth stating.
State the identity you used. One line such as "APC + APS = 1, verified at Y = 300" shows the examiner you understood rather than substituted.

Formula sheet

Problem 1 — Value added method TB

Problem 2 — Income and expenditure methods TB

Problem 3 — Down the chain: GDPMP to PDI Illustrative

Problem 4 — Nominal GNP, real GNP and the deflator Illustrative

Problem 5 — Completing a consumption–saving schedule TB

Problem 6 — The textbook's own schedule TB

Problem 7 — The investment multiplier Illustrative

Problem 8 — Credit creation and the deposit multiplier TB

Problem 9 — The money multiplier with a currency drain Illustrative

Problem 10 — Inflation rate and real interest (Fisher effect) TB

Problem 11 — Budget constraint and deficits Illustrative

Practice set — try these unaided

Problem 3 — Down the chain: GDP_MP to PDI Illustrative