NATIONAL INCOME ,TRANSFER INCOME ,FACTOR INCOME,FINAL GOOD INTERMEDIATE GOOD

Good morning boys
Yesterday we had spoken about the Domestic Territory and Normal residents of a country.
We had also dicussed the concept of Citizenship.
If there are any doubts please feel free to clarify them.
Before we begin the class i would like to share the answers to yesterday's questions.

Let us begin our class today by giving out the answers of yesterday.

The concept of Transfer Income is very important in National income accounting.
Before i explain any further i would like you to watch the video link .

https://www.youtube.com/watch?v=AdqZ2Insu4M

I hope the video was self explanatory.
Copy the board work on the video in your exercise copy.
Just to recap remember that Factor incomes are included in National Income whereas Transfer Incomes are not to be included in National Income.
Remember that Pension is a Factor Income because you have worked for a number of years to get that Factor Income while Old Age Pension is a Transfer Income because once you cross the age of 65 you can be entitled to Old Age Pension.whether you worked for the government or not.

Let us shift our focus to an important topic from the point of view of the boards..
It could come to you as a 4 mark question.
We are talking about Final Good and Intermediate Good.
I invite to watch the video link

https://www.youtube.com/watch?v=4q7kHcPvCVk

One very important point in the video is Intermediate goods not used up within the year.
Let us consider an example .
Suppose you as a business man bought 100 bags of cement on 1st january 2020.
During the year you were able to use only 95 bags till 31st December 2020.
So now you have 5 bags left over which will be carried forward to the year 2021.So these 5 bags will be an investment for you in the year 2021 while 95 bags would be Intermediate goods for the year 2020.
If you have any queries you can clear it eith me.
Another important point is that no good in itself  is a Final Good or an Intermediate Good.It is the END USE of the good that qualifies it to be a Final or an Intermediate Good.
For example milk bought by you at home is a Final Good whereas Milk bought by a sweet shop is an Intermediate Good.

Now sending you an assignment which needs todone in your exercise copies

 Q1) Classify the following as Factor or Transfer Income
a)  Unemployment allowance
b)   Salary recieved by Rakesh from a company
c)   Financial help to earthquake victims
d)   Compensation recieved from the employer
e)   Claim recieved from Insurance company by injured worker
f)   Birthday gift recieved from a friend
g)   Bonus recieved on Diwali

Q2)  Classify the following as Final or Intermediate good

a) Machine purchased by a firm
b) Soft drinks purchased by the school canteen
c) Clothes purchased by an individual
d) Coal purchased by a factory
e) Electricity consumption in a business
f) Books purchased by a book seller
g) Book purchased by a student.
h) Postage stamps purchased by a consumer
i) Postage stamps purchased by a business unit
j) Exhaust fans used for making water coolers
k) Seeds purchased by a farmer to produce wheat
l) Seeds purchased for kitchen gardening
m) Machines purchased by a dealer of machines
n) Car purchased by a household
o) Sewing machine purchased by a housewife