Macro

National Income

Medium

Suppose the GDP at market price of a country in a particular year was Rs 2,100 crores. Depreciation was Rs 50 crores. The value of Indirect taxes was Rs 250 crores, Subsidies was Rs 150 crores and National Income was Rs 1250 crores. Calculate the aggregate value of net factor income from abroad.

-700

700

850

-850

✅ Correct Option: 1

Option 1: -700 -> Given GDP_MP = 2,100 crores, Depreciation = 50 crores, Indirect taxes = 250 crores, Subsidies = 150 crores, and NI = 1,250 crores. First, calculate NDP_MP = GDP_MP - Depreciation = 2,100 - 50 = 2,050 crores. Then, calculate Domestic Income (NDP_FC) = NDP_MP - Indirect taxes + Subsidies = 2,050 - 250 + 150 = 1,950 crores. Using the formula: National Income = Domestic Income + NFIA, we get 1,250 = 1,950 + NFIA, therefore NFIA = 1,250 - 1,950 = -700 crores. The negative value indicates that factor payments to abroad exceed factor receipts from abroad. -> correct

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Suppose the GDP at market price of a country in a particular year was Rs 2,100 crores. Depreciation was Rs 50 crores. The value of Indirect taxes was Rs 250 crores, Subsidies was Rs 150 crores and National Income was Rs 1250 crores. Calculate the aggregate value of net factor income from abroad.

Solution

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