CBSE 2025, Set 1

Question

(b) (i) Distinguish between Stock and flow variables, using suitable examples.
(ii) Explain the components of 'Profit' as per Income Method of estimating National Income ($NNP_{FC}$).

Edvaya · Accepted Answer

The correct answer is Subjective. **(i)** Stock variables refer to those variables which are measured at a particular point of time.
*Example:* National Wealth
Flow variables refer to those variables which are measured over a period of time.
*Example:* National Income
*(Any other valid example to be awarded marks)*

**(ii)** The components of 'Profit' as per Income Method of estimating National Income ($NNP_{FC}$):
* **Corporate Tax:** Taxes imposed on the income made by the corporations (or private sector firms).
* **Undistributed Profits:** Part of the profit earned by the private and government-owned firms which are not distributed among the factors of production.
* **Dividend:** The residual profit which is distributed among the shareholders (owners of capital).

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Economics > Introductory Macroeconomics > National Income Aggregates

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