Calculate (a) Gross Domestic Product at Market Price, and (b) Factor income from abroad from the following data Profits ₹ 500

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Anurag Pathak28.35K November 7, 2023 0 Comments

Calculate (a) Gross Domestic Product at Price, and (b) Factor income from abroad from the following data:

Particulars	₹ in Crores
(i) Profits	500
(ii) Exports	40
(iii) Compensation of employees	1,500
(iv) Gross national product at factor cost	2,800
(v) Net current transfers from rest of the world	90
(vi) Rent	300
(vii) Interest	400
(viii) Factor income to abroad	120
(ix) Net indirect taxes	250
(x) Net domestic capital formation	650
(xi) Gross fixed capital formation	700
(xii) Change in stock	50

Ans: (a) ₹ 3,050 crores; (b) ₹ 120 crores

score 0 · Answer 1 · 2023-11-07T11:56:53+00:00

Solution:-

Calculation of Gross Domestic Product at Market Price

NDP at FC = Compensation of Employees + Mixed Income + Rent + Interest + Profits

NDP at FC = ₹ 1,500 + 0 + ₹ 300 + ₹ 400 + ₹ 500

NDP at FC = ₹ 2700

Consumption of Fixed Capital = Gross Domestic Capital Formation (Gross fixed capital formation + Change in stock) – Net domestic capital formation

Consumption of Fixed Capital = ₹ 700 + ₹ 50 – ₹ 650

Consumption of Fixed Capital = ₹ 100

GDP at MP = NDP at FC + Consumption of Fixed Capital + Net Indirect Taxes

GDP at MP = ₹ 2700 + ₹ 100 + ₹ 250

GDP at MP = ₹ 3050 Crores

Calculation of Factor Income from Abroad

GDP at MP = GNP at FC + Net Factor income from abroad (Factor income from abroad – Factor income to abroad) + Net indirect taxes

₹ 3050 = ₹ 2,800 + (Factor income from abroad – ₹ 120) + ₹ 250

Factor income from abroad = ₹ 3050 – ₹ 2,800 – ₹ 250 + ₹ 120

Factor income from abroad = ₹ 120 Crore