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ELEMENTARY ECONOMICS Economics 1 Section II October 18, 1946
I. [20] What are the different types of business organization? Consider briefly the chief differences between them, and the advantages and disadvantages of each one.
II. [40] (a) There are three ways of regarding the National Income of a country. List the elements which should be included in each of the three formulations. (In your answer take account of the activities of Government, and of the economic relations of the country with other countries.)
(b) Give brief answers on the following points:
1. What is meant by measurement of national output "at factor cost"? In which formulations is this important? Why?
2. How are "social security benefits" handled? Why? In connection with which of the three formulations of National Income? Why?
3. What are visibles and invisibles? In which of the three formulations of the National Income are they included? Why?
4. What are direct taxes? In which of the three formulations of the National Income are they included? Why? Are other taxes also included in this formulation? Explain.
5. What is a creditor nation? Set down the items and sub-items on each side of the Balance of Payments for such a nation.
III. [15] ARE MARKED OUT
IV. [25] (a) Draw up an imaginary Balance Sheet for an imaginary corporation.
(b) Which of the items in your Balance Sheet should be counted in computing the National Capital of a country? Explain your answers briefly. Which should not be counted? Explain.
(c) Should any part of the national debt be taken into consideration in computing a country's National Capital? What part, and how?
Hand written side notes: Y=C+I, Y=C+S, Y=W+P
