(I) From the following data, calculate the value of operating surplus : (II) Distinguish between 'Fixed Investment' and 'Inventory Investment'. (I) From the following data, calculate the value of compensation of employees (COE) : (II) Distinguish between stock and flow variables.

Question

Accepted Answer

(I) Operating Surplus calculation:
Operating Surplus = Rent + Interest + Profit + Royalty
Or: Operating Surplus = NDP_FC - Compensation of Employees - Mixed Income

(II) Distinguish between Fixed Investment and Inventory Investment:

Fixed Investment: Investment in fixed assets like machinery, buildings, equipment. It is long-term and adds to productive capacity.

Inventory Investment: Investment in stocks of raw materials, work-in-progress, and finished goods. It is short-term and fluctuates with business cycles.

(I) Compensation of Employees calculation:
Compensation of Employees = Wages and Salaries + Social Security Contributions + Pension contributions